Sterling Infrastructure Inc. (STRL) announced Wednesday that its board has approved a fresh $400 million share repurchase program, giving management substantial firepower to buy back stock over the next two years.
The new authorization replaces an existing program that was set to expire in December 2025. That previous program still had about $81 million left on it, which means Sterling is essentially quintupling its buyback capacity just as the old one was winding down.
How the Buyback Will Work
Sterling kept things flexible on the execution front. The company said management will decide when and how much to repurchase based on market conditions and other factors. Buybacks could happen through open-market purchases, privately negotiated deals, or other methods permitted under securities laws.
Importantly, there's no obligation to repurchase any specific dollar amount, and the board can modify, pause, or cancel the program whenever it wants. Think of it as authorization rather than commitment.
Management's Confidence Signal
"This expanded share repurchase authorization reflects our continued confidence in Sterling's outlook," said Joe Cutillo, the company's CEO. He pointed to Sterling's solid financial position as enabling what he called "a balanced capital allocation strategy."
"With our strong balance sheet and cash flow, we are well-positioned to pursue a balanced capital allocation strategy that supports our investments in organic growth and strategic acquisitions, while returning capital to shareholders," Cutillo explained. "We will continue to pursue an opportunistic approach to share repurchases."
Translation: We'll buy back shares when the price looks attractive, but we're not sacrificing growth investments to do it.
Strong Earnings Backdrop
The buyback authorization comes on the heels of an impressive earnings report earlier this month. Sterling delivered third-quarter earnings of $3.48 per share, absolutely crushing analyst expectations of $2.48 and up sharply from $1.97 in the same quarter last year.
Revenue climbed to $689.02 million from $593.7 million year-over-year, topping the consensus estimate of $621.27 million. Performance was strong across the company's key operating segments.
Sterling also bumped up its full-year 2025 guidance substantially. The company now expects adjusted earnings per share between $10.35 and $10.52, compared to previous guidance of $9.43 to $9.71 and well above Wall Street's $8.10 consensus estimate.
Revenue guidance also got a boost, with Sterling projecting $2.375 billion to $2.390 billion for the year versus earlier guidance of $2.23 billion to $2.29 billion.
Price Action: STRL shares were up 2.44% to $390.52 Wednesday.