COMPANIES PLAN BUYBACKS IN CONFIDENCE-RAISING MOVE.

Byline: The New York Times

A day after the market tumbled 512 points, companies large and small attempted Tuesday to reassure investors by announcing that they planned to buy back their own shares.

Comcast Corp., the cable-television giant, said it would buy back up to $500 million of its stock. Boeing Co. made a similar announcement after the markets closed Monday, saying it planned to purchase up to 15 percent of its outstanding shares.

And, among more than a dozen small companies announcing such buybacks, Movie Gallery Inc., a chain of video stores based in Dothan, Ala., said it would spend up to $5 million on its own shares.

But if the past is a guide, not all the stock buybacks will benefit shareholders. Many companies also bought their own shares after Black Monday in October 1987. And at least one study showed that most of the companies that bought back their stock after that market crash lagged behind the rest of the market in later years.

The buybacks, some investment analysts say, can be a sign of a weak company desperately attempting to improve prospects in the short term.

``Weak markets encourage weak companies to buy back stock,'' said Carol Bruckner Coles, president of Mitchell & Co., a consulting firm in Waltham, Mass., that did a study of the stock buybacks after the 1987 crash. Many of the companies that bought back stock in 1987 were showing weak profits, she said, and the additional spending to repurchase stock only seemed to weaken them further.

And other analysts have pointed out the money some companies use to buy back shares might be better spent on the development of new products or the purchase of more efficient machinery.

But as the market has declined in the past month, more and more companies have announced they would buy back shares. With one month of the year's third quarter yet to go, the number of companies announcing buyback programs already far exceeds the companies doing so in either the first or second quarter.

According to the Securities Data Co., 391 companies announced buyback programs between July 1 and Aug. 28 compared with 299 companies doing so in the first quarter and 280 companies in the second quarter.

Company executives propose stock buyback programs because they are convinced the programs will increase share prices. Often, the stock buybacks can lure investors by making a company's earnings and cash flow numbers look better.

Chatsworth company to repurchase shares

Chatsworth-based telecommunications equipment maker MRV Communications Inc. announced before the markets opened Tuesday that it would buy back up to 1 million shares of the company's common stock.

Weak sales and a delayed launch of new equipment have pushed MRV stock down 79 percent since mid-April.

MRV shares closed Tuesday up 34.375 cents at $5.9375.

- Daily News

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BOX: Chatsworth company to repurchase shares (see text)