International Business Machines Corp. (NYSE: IBM) may have severely disappointed investors with last week’s earnings and revenue confession. Now it turns out that IBM’s board of directors has declared a regular quarterly cash dividend of $1.10 per common share. The problem is that IBM also authorized $5 billion in additional capital to be to be added to its stock buyback program.

What the company said is that this is in addition to the $1.4 billion which was remaining at the end of September 2014 from a prior authorization. With this new authorization, IBM will have approximately $6.4 billion for its stock repurchase program.

IBM telegraphed that it also expects to request additional share repurchase authorization at the April 2015 board meeting. IBM said that it will repurchase shares in the plan on the open market or in private transactions.

As a reminder, IBM has been engineering its earnings growth on effectively no revenue growth at all. When the company gave its earnings warning last week it finally removed that dead-set path to $20 in earnings per share by the end of 2015. IBM keeps buying back stock to engineer earnings growth, while it could go out and make acquisitions that bring in real growth on the top-line as well.

Ginni Rometty was quoted saying,

We will continue to make the investments and changes necessary to manage our business for the long term and to shift to higher-value offerings.  At the same time we remain fully committed to returning significant value to shareholders.

24/7 Wall St. just recently named IBM as one of 8 companies that just ruined their long-term stock prospects. This does not change that verdict at all — in fact, it is just more financial shenanigans.

ALSO READ: How to Evaluate GE in 2015 and Beyond

If the market thought this was great news, IBM shares would be up far more. At 2:30 Eastern Time IBM shares were up 0.7% at $163.05 against a 52-week range of $161.10 to $199.21. More trickery to hide deeper problems.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.