Not necessarily. IBM has had 20 consecutive quarters of declining revenue [1]. They continue to buy back stock, adding $3B to their repurchase program last year. They've bought back stock furiously since 1999 [2]. It's a defensive measure to reduce the share float, and thereby juice EPS.
It's a good policy to buy back stock whenever you have excess cash flow and the stock is undervalued compared to your other investment options. An example might be your stock has a PE ratio of 8, so it's yielding 12.5% and your other options look to yield 10% or less.
Of course I'm not saying IBM is right, or undervalued. If profits are falling a 12% yield might be a 6% yield before you know it, that's why valuations are more complex than my simplistic example. And many companies do buybacks to juice stock prices for the execs options, regardless of value, so it's not a grant signal.
Of course I'm not saying IBM is right, or undervalued. If profits are falling a 12% yield might be a 6% yield before you know it, that's why valuations are more complex than my simplistic example. And many companies do buybacks to juice stock prices for the execs options, regardless of value, so it's not a grant signal.