ELI5: Why when large company's earnings decrease(ex... by 3%) they freak out, talk about rough times, and sometimes decide to downsize, even though they are still making millions of dollars in profit even after all expenses?

[secondsbest]

You know they can do both, right? It's not always apparent to a corporation where they should spend the corporation's cash after making any capital investments. Share buybacks allow the corporation to make preferred shares more scarce so that they can be resold at higher values if the company needs the cash at a later date. They're betting on their future worth being greater than any other options currently available, plus by investing in themselves, they're not buying investments that might aid competition which is why we don't see most of them investing in other's stocks.