Photography company Eastman Kodak said Tuesday that it was awarded a $581 million tax refund and would repurchase up to $1 billion of its stock, driving its share price up nearly 17 percent.
Kodak , which has completed major elements of an expensive transformation into a smaller company that focuses on digital photography products and services, said the buyback at current prices represents about 25 percent its outstanding shares.
The company said the tax refund related to an audit of certain claims filed for tax years 1993-1998 and is comprised of a refund of past federal income taxes paid of $306 million and interest earned on the refund of $275 million.
The company plans to fund the majority of the stock repurchase program, which is authorized through the end of 2009, from the tax refund, with the remainder coming from available cash on hand.
Shares of Kodak jumped $2.08 to $14.42 in early trade on the New York Stock Exchange.
The shares yesterday hit a 52-week low $12.20.