Docomo Plans $2.6 Billion Buyback to Spur Shareholder Return

(Bloomberg) -- NTT Docomo Inc., Japan’s largest mobile phone carrier, plans to buy back as much as 300 billion yen ($2.6 billion) of its own stock to improve returns after two quarters of declining profit helped hold the shares’ performance below the benchmark this year.

The repurchase will run from Oct. 27 through March 31, 2018, the Tokyo-based company said Thursday in a statement, after posting a decline in second-quarter net income. Docomo shares have gained 1.4 percent this year, compared with a 15 percent advance for the benchmark Topix index.

Profit growth at the affiliate of Japan’s former telephone monopoly will probably slump to 4 percent this year, based on analyst estimates, in a market where the number of mobile phone subscriptions exceeds the population. The planned buyback announced Thursday would bring total stock repurchases by the company to 2.79 trillion yen since 2002.

While Japan’s mobile phone market is saturated, Docomo’s smaller rivals have been cutting prices to try and lure away users. Operating margin will decline slightly this fiscal year, ending a three year gain to about 21 percent, according to data from analyst estimates.

To contact the reporter on this story: Dave McCombs in Tokyo at dmccombs@bloomberg.net.

To contact the editors responsible for this story: Young-Sam Cho at ycho2@bloomberg.net, Jeff Sutherland, Lena Lee

©2017 Bloomberg L.P.