IBM Corp. plans an additional $5 billion stock buyback, bringing its total repurchases up to $9.2 billion for the year. And it will add even more in April 2010. Since 2003 it has spent some $73 billion on dividends and buybacks. Buybacks are a way to increase earnings per share by reducing the number of shares outstanding. IBM has set aggressive earnings targets and has raised its profit forecast for 2009 twice, despite falling revenues since last year. One way IBM gains more profit despite lower sales is through the use of software to automate tasks done by humans and focusing on projects like the "smart" power grid that carry high profit margins. IBM's current forecasts expect earnings of $9.85 per share this year, and IBM says it is ahead of the pace to reach earnings of $10 to $11 per share next year. IBM ended the third quarter with $11.5 billion in cash. Free cash flow, a sign of a company's ability to generate more cash, was $3.4 billion, up $1.3 billion from a year ago, although revenue over the past three quarters is down about 11% over last year. Read more: BusinessWeek
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