Apple spent $16 billion last quarter to repurchase 36 million shares

Posted:
in AAPL Investors edited January 2014
Apple's massive share buyback program was in full swing in the June quarter, when the company spent $16 billion on itself ??enough to buy rival BlackBerry three times over.

Apple


The original schedule called for Apple to repurchase 10 million shares in its third fiscal quarter of 2013, Philip Elmer-Dewitt of Fortune 2.0 noted on Thursday. But with shares of Apple trading well below where they were a year prior, Apple instead apparently decided to push hard and buy 36 million shares.

Of the $16 billion Apple spent, $12 billion came out of the company's accelerated share repurchase program, and the remaining $4 billion were shares bought on the open market. The average price paid was $444.44.

That average share price was nearly $200 off from the company's high of $636.23 seen a year prior, during the June quarter of 2012. Apple's all-time high came last September, when iPhone 5 hype pushed shares to $702.10.

The amount spent by Apple on its own stock in one quarter exceeded the $12.5 billion Google paid to acquire Motorola Mobility. It also topped the market values of handset makers Nokia ($14.89 billion) and BlackBerry ($4.64 billion), panel manufacturers LG Display ($8.93 billion) and Sharp Corp. ($5.07 billion), as well as content providers Netflix ($13.55 billion) and Barnes & Noble ($1.06 billion).

Apple announced its massive $100 billion capital return program, the largest of its kind in history, in April. The plan runs through 2015 and includes $60 billion in authorized share repurchases, as well as an increase of Apple's quarterly dividend by 15 percent.

By spending $16 billion in the June quarter, Apple still has some $44 billion left to invest in itself over the next two and a half years.
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Comments

  • Reply 1 of 74
    superbasssuperbass Posts: 688member


  • Reply 2 of 74
    jusephejusephe Posts: 108member
    So that's the reason why total profit was lover this quarter !
  • Reply 3 of 74
    ankleskaterankleskater Posts: 1,287member

    Quote:

    Originally Posted by jusephe View Post



    So that's the reason why total profit was lover this quarter !


    No.

  • Reply 4 of 74
    herbapouherbapou Posts: 2,221member


    Good timing, if they know they are coming up with a great line up, its a good idea to be very agressive while the sotck price is low.


     


    They destroy about 3.5% of the shares, so EPS was 3.5% higher than without the buyback. So we got 7.47 EPS instead of 7.20 EPS.  The difference between a beat and a miss.


     


    When Apple is done, we will have gone from around 1 billions shares to around 850 millions shares.

  • Reply 5 of 74
    chandra69chandra69 Posts: 638member


    Why do the companies buyback shares?

  • Reply 6 of 74
    ankleskaterankleskater Posts: 1,287member

    Quote:

    Originally Posted by herbapou View Post


    Good timing, if they know they are coming up with a great line up, its a good idea to be very agressive while the sotck price is low.


     


    They destroy about 3.5% of the shares, so EPS was 3.5% higher than without the buyback. So we got 7.47 EPS instead of 7.20 EPS.  The difference between a beat and a miss.



    No.

  • Reply 7 of 74
    anantksundaramanantksundaram Posts: 19,163member
    Excellent. Hope they maintain the pace.
  • Reply 8 of 74
    ankleskaterankleskater Posts: 1,287member

    Quote:

    Originally Posted by Chandra69 View Post


    Why do the companies buyback shares?



    Do you want to commonly accepted reason or the real reason?

  • Reply 9 of 74
    anantksundaramanantksundaram Posts: 19,163member
    chandra69 wrote: »
    Why do the companies buyback shares?

    For a handful of reasons, some good, some dubious. The good ones include: (1) putting your money where your mouth is, thereby credibly signaling to the market that your stock is undervalued, since you think your own stock is a great investment even if the market does not; (2) buying stocks 'low' to keep as treasury stock for future employee option exercises, so as to mitigate future dilution for existing shareholders; (3) returning money in a tax-efficient way to investors; (4) doing an equity-for-debt swap to make a capital structure change -- i.e., take on debt to buy back shares.

    The dubious ones include: (1) trying to boost reported EPS with the expectation that will enhance market value; (2) greenmail (i.e., targeted repurchases, like Yahoo did with Loeb a couple of days ago); (3) attempting to take shares out of circulation to minimize chances of being taken over.
  • Reply 10 of 74
    matrix07matrix07 Posts: 1,993member


    $444 per share is a bit high. I thought Apple moved when the stock slipping below $400.

  • Reply 11 of 74
    ankleskaterankleskater Posts: 1,287member

    Quote:

    Originally Posted by anantksundaram View Post





    For a handful of reasons, some good, some dubious. The good ones include: (1) putting your money where your mouth is, thereby credibly signaling to the market that your stock is undervalued, since you think your own stock is a great investment even if the market does not; (2) buying stocks 'low' to keep as treasury stock for future employee option exercises, so as to mitigate future dilution for existing shareholders; (3) returning money in a tax-efficient way to investors; (4) doing an equity-for-debt swap to make a capital structure change -- i.e., take on debt to buy back shares.



    The dubious ones include: (1) trying to boost reported EPS with the expectation that will enhance market value; (2) greenmail (i.e., targeted repurchases, like Yahoo did with Loeb a couple of days ago); (3) attempting to take shares out of circulation to minimize chances of being taken over.


    Why is dubious (3) more dubious than good (3)?

  • Reply 12 of 74
    herbapouherbapou Posts: 2,221member


    I dont understand how they could have increase the cash hoard. 


     


    Quote:




    “We generated $7.8 billion in cash flow from operations during the quarter, and are pleased to have returned $18.8 billion in cash to shareholders through dividends and share repurchases,” said Peter Oppenheimer,




     


    Then how did they increase the Cash Hoard by 1.9 millions from last quarter? Borrowed money from the bonds?


     


    LEAD Technologies Inc. V1.01

  • Reply 13 of 74
    tallest skiltallest skil Posts: 43,399member
    Do you want to commonly accepted reason or the real reason?

    They're taking themselves private! ;)
  • Reply 14 of 74
    apple ][apple ][ Posts: 8,657member
    matrix07 wrote: »
    $444 per share is a bit high. I thought Apple moved when the stock slipping below $400.

    I think that share buybacks are spread out. They don't decide to suddenly buy back all of the shares in one day.
  • Reply 15 of 74
    red oakred oak Posts: 665member
    $444 is high, given the average stock price since they started the program

    I was hoping they backed up the truck when it was under $400

    I would describe this as a misfire on their part
  • Reply 16 of 74
    ankleskaterankleskater Posts: 1,287member

    Quote:

    Originally Posted by Red Oak View Post



    $444 is high, given the average stock price since they started the program



    I was hoping they backed up the truck when it was under $400



    I would describe this as a misfire on their part


    I would say, not at all.

  • Reply 17 of 74
    ankleskaterankleskater Posts: 1,287member

    Quote:

    Originally Posted by Tallest Skil View Post





    They're taking themselves private! image


    You just had to give away the real reason, didn't you?

  • Reply 18 of 74
    tallest skiltallest skil Posts: 43,399member
    red oak wrote: »
    $444 is high, given the average stock price since they started the program

    I was hoping they backed up the truck when it was under $400

    I would describe this as a misfire on their part

    I rather think a company intelligent enough to earn 140 BILLION DOLLARS IN CASH knows how to then use that money. :no:
    You just had to give away the real reason, didn't you?

    It was more dramatic that way.
  • Reply 19 of 74
    mikejonesmikejones Posts: 323member



    Quote:

    Originally Posted by matrix07 View Post


    $444 per share is a bit high. I thought Apple moved when the stock slipping below $400.


     




     


    Quote:


    Originally Posted by Red Oak View Post



    $444 is high, given the average stock price since they started the program



    I was hoping they backed up the truck when it was under $400



    I would describe this as a misfire on their part


    The stock price was only under $400 for like 3 days in April and 3 days in June. Most of the rest of the quarter it was between around the 410s to 450s. It's also doubtful they could purchase $16 billion worth of shares in such tiny windows since there is simply just not that much volume being traded in a day. And even if they could, you do realize at $400 a share that would be around 40 million shares or nearly quadruple their daily volume, right? Even over a three day period that would drive the price through the roof with such a huge swing in volume. Then you armchair CEOs would be whining even more. They basically stagger purchased throughout the quarter which is a perfectly smart thing to do without causing huge volatility swings.

  • Reply 20 of 74
    mikejonesmikejones Posts: 323member

    Quote:

    Originally Posted by Tallest Skil View Post



    I rather think a company intelligent enough to earn 140 BILLION DOLLARS IN CASH knows how to then use that money. image


    Nuh uh! These armchair CEOs that have never run a business, let alone a massively profitable multinational business, in their life are clearly more competent than Tim Cook! If Apple's BoD was smart they'd install Red Oak and matrix07 as the co-CEOs of the company. Apple's stock would then be up to a billion dollars per share in no time! /s

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