Apple spent $16 billion last quarter to repurchase 36 million shares
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.
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.
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.
Comments
Quote:
Originally Posted by jusephe
So that's the reason why total profit was lover this quarter !
No.
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.
Why do the companies buyback shares?
Quote:
Originally Posted by herbapou
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.
Quote:
Originally Posted by Chandra69
Why do the companies buyback shares?
Do you want to commonly accepted reason or the real reason?
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.
$444 per share is a bit high. I thought Apple moved when the stock slipping below $400.
Quote:
Originally Posted by anantksundaram
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)?
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?
They're taking themselves private!
I think that share buybacks are spread out. They don't decide to suddenly buy back all of the shares in one day.
I was hoping they backed up the truck when it was under $400
I would describe this as a misfire on their part
Quote:
Originally Posted by Red Oak
$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.
Quote:
Originally Posted by Tallest Skil
They're taking themselves private!
You just had to give away the real reason, didn't you?
I rather think a company intelligent enough to earn 140 BILLION DOLLARS IN CASH knows how to then use that money. :no:
It was more dramatic that way.
Quote:
Originally Posted by matrix07
$444 per share is a bit high. I thought Apple moved when the stock slipping below $400.
Quote:
Originally Posted by Red Oak
$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.
Quote:
Originally Posted by Tallest Skil
I rather think a company intelligent enough to earn 140 BILLION DOLLARS IN CASH knows how to then use that money.
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