Merrill to Buy Back Up to $2 Billion of Stock

Merrill Lynch & Co. said Tuesday that it would buy back as much as $2 billion of stock. The last time Merrill bought back shares was in 1997, spokeswoman Jessica Oppenheim said.

The buyback represents about 3.7% of New York-based Merrill’s market value and comes after Chief Executive Stanley O’Neal reported record fourth-quarter earnings and began adding employees.

“Merrill was first and most aggressive in managing the cost structure, including compensation, and now they are first in managing the capital structure, both to benefit shareholders,” UBS financial services analyst Glenn Schorr wrote in a report.

Merrill shares rose 47 cents to $58.20 on the New York Stock Exchange. They have risen 74% in the last 12 months and trade at 14 times estimated earnings.

Merrill earnings might rise 10 cents a share if the buyback were completed early this year, Schorr said. That could raise the $4.13 a share in projected 2004 profit that is the average estimate of 19 analysts surveyed by Thomson First Call.