Apple bought back $56 billion worth of its own stock in 2014

Posted:
in AAPL Investors edited December 2014
This year, Apple spent three times more investing in itself than the next closest company in the S&P 500, totaling $56 billion on stock buybacks in fiscal 2014.


The New York Stock Exchange, credit Carlos Delgado via Wikipedia.


Apple's total buyback efforts for the fiscal year were calculated by FactSet, and highlighted by MarketWatch on Friday. The $56 billion spent by Apple well exceeded second-place S&P 500 finisher IBM Corp, which used $19.2 billion on buybacks.

In the last quarter alone, Apple spent a massive $17 billion on stock buybacks. When that sum was revealed in October, it was estimated that Apple had spent $45 billion on repurchasing stock in fiscal 2014, but the latest data from FactSet shows Apple went even beyond that.

In fact, Apple also owns the top two buyback quarters ever in the S&P 500 tracked by FactSet, since it began measuring the data in 2005. The $17 billion Apple repurchased last quarter is second only to the $18.6 billion it bought in the first quarter of fiscal 2014.

Apple first announced its dividend share and repurchase program in March of 2012, and at the time pledged to spend $45 billion on itself over three years. The company increased the program to $100 billion a year later.

Then again this April, Apple announced it would once again increase its buyback efforts, and the company also revealed it would undergo a 7-for-1 stock split that eventually came to pass in June. Based on Apple's current annual schedule, the company would likely revisit its buyback efforts once again, and take into consideration the requests of billionaire Carl Icahn and others, following its March 2015 quarter.

Faced with pressure from the likes of Icahn, Apple has said it will review its share buyback program annually.
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Comments

  • Reply 1 of 55
    robmrobm Posts: 1,068member
    With Apple underpinning demand Ol Carl's going to ride this pony all the way home.
  • Reply 2 of 55

    Don't worry, I've already seen reports of how this is a bad thing. Analysts say this is evidence Apple has no idea what to invest in for future innovations.

  • Reply 3 of 55
    cnocbuicnocbui Posts: 3,613member

    So the more Apple buys back, the greater Icahn's influence over the company becomes as you can be sure he won't have sold any of the shares Apple bought.

  • Reply 4 of 55
    apple ][apple ][ Posts: 8,697member
    Quote:
    Originally Posted by cnocbui View Post

     

    So the more Apple buys back, the greater Icahn's influence over the company becomes as you can be sure he won't have sold any of the shares Apple bought.




    So what? iCahn has zero influence in the day to day operations of Apple and obviously has nothing to do with any of their product plans. He just wants Apple to buy back more stock, that's a good thing. I think that the more stock that Apple buys back means a lesser likelihood 

    of us seeing a repeat of what happened when AAPL took a big tumble.

  • Reply 5 of 55
    Maybe the newly elected republicans and Obama will allow a tax repatriation holiday and Apple can keep the buy backs going next year.
  • Reply 6 of 55

    I think it makes little sense for Apple to be buying back too much more of its shares at the current price. Debt notwithstanding.

     

    An increased dividend -- or a large, one-time, special dividend -- might be a better way to return money to shareholders.

  • Reply 7 of 55
    apple ][apple ][ Posts: 8,697member
    I think it makes little sense for Apple to be buying back too much more of its shares at the current price. Debt notwithstanding.

    An increased dividend -- or a large, one-time, special dividend -- might be a better way to return money to shareholders.

    Sure, i have no objections to that plan either.
  • Reply 8 of 55
    Quote:

    Originally Posted by anantksundaram View Post

     or a large, one-time, special dividend -- might be a better way to return money to shareholders.

    iPod Shuffle sounds nice.

  • Reply 9 of 55
    apple ][apple ][ Posts: 8,697member
    Quote:

    Originally Posted by TheWhiteFalcon View Post

     

    iPod Shuffle sounds nice.




    What do you mean? An iPod shuffle is only like $49.

     

    I'll take the extra dividend cash instead, thank you very much.:smokey:

  • Reply 10 of 55
    Quote:

    Originally Posted by Apple ][ View Post

     



    What do you mean? An iPod shuffle is only like $49.

     

    I'll take the extra dividend cash instead, thank you very much.:smokey:




    Well, I'd love to say a Retina iMac sounds nice, but I don't think Apple would be served by giving out a $2500 computer to every shareholder of record.

     

    A special, engraved Shuffle sounds quite nice.

  • Reply 11 of 55
    malaxmalax Posts: 1,598member
    Quote:

    Originally Posted by TheWhiteFalcon View Post

     



    Well, I'd love to say a Retina iMac sounds nice, but I don't think Apple would be served by giving out a $2500 computer to every shareholder of record.

     

    A special, engraved Shuffle sounds quite nice.


    I assume you're not serious.  As a shareholder, I would be quite annoyed if they wasted their money doing that.  There would almost certainly be a shareholder lawsuit since it violates the principle of apportioning benefits proportionate to shares.

  • Reply 12 of 55
    Quote:

    Originally Posted by malax View Post

     

    I assume you're not serious.  As a shareholder, I would be quite annoyed if they wasted their money doing that.  There would almost certainly be a shareholder lawsuit since it violates the principle of apportioning benefits proportionate to shares.




    There's precedent for giving gifts to shareholders. Remember, a Shuffle costs like $12 to manufacture.

  • Reply 13 of 55
    mj webmj web Posts: 918member
    Between the buyback and stock split AAPL exhibited astute financial engineering acumen. Carl Icahn was undoubtedly an impetus as any stock chart reveals. Apple's first rise from its two year post Job's era doldrum coincided with Carl Icahn's activism. Tim Cook is a bright guy who surrounds himself with the brightest talent and it's fortunate Carl Icahn was there to school him.
  • Reply 14 of 55
    radarthekatradarthekat Posts: 3,133moderator

    All this about Carl Icahn being the impetus for Apple giving back so much cash is a bit overdone.  Fact is, years prior, Steve Jobs spoke to Warren Buffett on the topic, was advised then to use excess cash to buy back stock if the shares traded at a reasonable margin below intrinsic value.  Jobs, facing a growing sphere of strong competition in all its product lines, simply didn't yet feel he had excess cash.  He likely felt he might need all the cash he could pile up in his battle against Google, the PC vendors, the Android handset vendors, and then tablet vendors, and others he knew would come along as his roadmap played out.  Only later, under Tim Cook, did the cash pile up so high and there was sufficient visibility into the competitive landscape and how Apple would fare with its strategy, I think, was it evident that the company indeed had more cash than it would possibly need to maintain its leadership position.  And so Cook and Oppenheimer, initially cautious, started returning cash to shareholders in the form of dividends and buybacks.  Then accelerated the buybacks as confidence grew and as the cash pile steadily expanded.  Ockham's razor suggests this is more likely the way things played out versus Apple's management, fully capable of getting its head around such straightforward issues as dividends, buybacks, and cash management, would need to wait until someone like Icahn came along to whisper in Cook's ear that "it's okay, you've got more than you need, give us some."

  • Reply 15 of 55
    apple ][apple ][ Posts: 8,697member
    Quote:

    Originally Posted by TheWhiteFalcon View Post

     



    There's precedent for giving gifts to shareholders. Remember, a Shuffle costs like $12 to manufacture.




    I would like that Apple back pack that they gave to employees recently.

  • Reply 16 of 55
    MacProMacPro Posts: 18,373member
    robm wrote: »
    With Apple underpinning demand Ol Carl's going to ride this pony all the way home.

    Hopefully all of us AAPL owners will too.
  • Reply 17 of 55
    MacProMacPro Posts: 18,373member
    iPod Shuffle sounds nice.

    They do give us dividends remember, that's even better ... although a Christmas bonus in extra dividends to all those who have owned AAPL for over 5 or 10 years would be nice :)
  • Reply 18 of 55
    apple ][apple ][ Posts: 8,697member

    I actually found that Apple backpack on eBay right now, but they want $250, and that's too much. I'd pay $100 for it.

  • Reply 19 of 55
    apple ][ wrote: »

    I would like that Apple back pack that they gave to employees recently.

    The WWDC jackets are nice too.
  • Reply 20 of 55
    Quote:

    Originally Posted by MJ Web View Post



    Between the buyback and stock split AAPL exhibited astute financial engineering acumen. Carl Icahn was undoubtedly an impetus as any stock chart reveals. Apple's first rise from its two year post Job's era doldrum coincided with Carl Icahn's activism. Tim Cook is a bright guy who surrounds himself with the brightest talent and it's fortunate Carl Icahn was there to school him.

    Thanks for the Friday afternoon laugh. <img class=" src="http://forums-files.appleinsider.com/images/smilies//lol.gif" />

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