Apple plans new $100B share buyback program, raises dividends by 16 percent

Posted:
in AAPL Investors edited May 1
Apple's board of directors has approved a $100 billion share buyback, as well as 16 percent jump in its quarterly dividend payments.

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An earlier buyback program -- worth some $210 billion -- will wrap up in the next quarter, Apple announced on Tuesday as a part of its latest quarterly results. The dividend increase is taking effect immediately, and will pay out $0.73 per share on May 17 to anyone owning stock at the end of the business day on May 14.

The company noted that between August 2012 and last March, its capital return program fed $275 billion to shareholders. The lion's share -- $200 billion -- came in the form of buybacks.

"The management team and the Board will continue to review each element of the capital return program regularly and plan to provide an update on the program on an annual basis," Apple said in a statement.

In December some analysts argued that Apple would likely grow its buybacks and dividends in the aftermath of the corporate tax cuts championed by the Republican Party and the Trump administration. The following month the company said it expected to contribute $350 billion to the U.S. economy during the next five years, including $38 billion in taxes on repatriated cash.

Apple reported its best-ever March quarter today, with some $61.1 billion in revenue, driven by about 52.2 million iPhone shipments. Much of this was credited to the iPhone X, which starts at $999 before AppleCare or any accessories.
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Comments

  • Reply 1 of 24
    SpamSandwichSpamSandwich Posts: 29,347member
    Screw the buyback. Buy more businesses which are crucial to Apple's operations and to them completely owning their product, from A-to-Z. How about buying up cell towers to lease back to the cellular providers if they're not going to buy a cellular service provider itself? Or go into business with Elon Musk's satellite Internet based company? Or buy up the mineral and mining operations which extract the rare earth materials used to make the batteries they require?
    edited May 1 jony0adm1GeorgeBMacpslice
  • Reply 2 of 24
    nunzynunzy Posts: 427member
    Apple treats it's shareholders like kings.
    GeorgeBMac
  • Reply 3 of 24
    SpamSandwichSpamSandwich Posts: 29,347member
    To listen to the earnings call:

    https://www.apple.com/investor/earnings-call/
  • Reply 4 of 24
    sirozhasirozha Posts: 332member
    $100 Billion in what timeframe?
  • Reply 5 of 24
    brucemcbrucemc Posts: 1,408member
    Screw the buyback. Buy more businesses which are crucial to Apple's operations and to them completely owning their product, from A-to-Z. How about buying up cell towers to lease back to the cellular providers if they're not going to buy a cellular service provider itself? Or go into business with Elon Musk's satellite Internet based company? Or buy up the mineral and mining operations which extract the rare earth materials used to make the batteries they require?
     This is exactly why Apple is doing the right thing, in giving the money back to the shareholders. Otherwise, in the future, there is the possibility that someone like yourself would come in and destroy the company by carelessly throwing all the money away on large acquisitions that almost never turn out (see any large tech purchase in the last 2 decades. 
    SolicornchippotatoleeksoupMacPronetmage
  • Reply 6 of 24
    Rayz2016Rayz2016 Posts: 3,797member
    Screw the buyback. Buy more businesses which are crucial to Apple's operations and to them completely owning their product, from A-to-Z. How about buying up cell towers to lease back to the cellular providers if they're not going to buy a cellular service provider itself? Or go into business with Elon Musk's satellite Internet based company? Or buy up the mineral and mining operations which extract the rare earth materials used to make the batteries they require?
    When you bring in $61.1billion for a quarterly revenue, then Cook will give a fig about your business plan. 
    cornchipradarthekatnetmage
  • Reply 7 of 24
    SpamSandwichSpamSandwich Posts: 29,347member
    This will be a nice rise tomorrow.


  • Reply 8 of 24
    anantksundaramanantksundaram Posts: 18,515member
    This will be a nice rise tomorrow.


    Maybe. The market has been quite funky lately, with lots of stocks reporting solid earnings numbers showing massive gains after-hours, but the gains pretty much disappearing by the end the following trading day. 
  • Reply 9 of 24
    SpamSandwichSpamSandwich Posts: 29,347member
    This will be a nice rise tomorrow.


    Maybe. The market has been quite funky lately, with lots of stocks reporting solid earnings numbers showing massive gains after-hours, but the gains pretty much disappearing by the end the following trading day. 
    Then I'll just hope for the best.
  • Reply 10 of 24
    cornchipcornchip Posts: 1,058member
    Jeepz. Wish I had bought back at $78. Oh well. Here’s to my IRA...
  • Reply 11 of 24
    AppleUfmyIAppleUfmyI Posts: 13member
    Most have to work for their money doing the grind every day.  The rich get to collect their dividends and buybacks without ever lifting a finger and performing a solid day of work.   Happy to see Apple not be an under dog for once in its history.   Sad that it’s all about appeasing hedge funds getting their pay.  
  • Reply 12 of 24
    radarthekatradarthekat Posts: 2,428moderator
    Screw the buyback. Buy more businesses which are crucial to Apple's operations and to them completely owning their product, from A-to-Z. How about buying up cell towers to lease back to the cellular providers if they're not going to buy a cellular service provider itself? Or go into business with Elon Musk's satellite Internet based company? Or buy up the mineral and mining operations which extract the rare earth materials used to make the batteries they require?
    Become a conglomerate, spread your management focus thin. That’s the answer.  See... GE.
  • Reply 13 of 24
    bestkeptsecretbestkeptsecret Posts: 2,794member
    Screw the buyback. Buy more businesses which are crucial to Apple's operations and to them completely owning their product, from A-to-Z. How about buying up cell towers to lease back to the cellular providers if they're not going to buy a cellular service provider itself? Or go into business with Elon Musk's satellite Internet based company? Or buy up the mineral and mining operations which extract the rare earth materials used to make the batteries they require?

    I see the buyback as Apple investing in the best tech company in the world.
    SpamSandwich
  • Reply 14 of 24
    radarthekat said: This allows those investors to invest that money elsewhere, and investment is the engine that drives economic activity, leading to growth. 
    Growth of the stock market that is. There's not much benefit anywhere else, which is part of the reason buybacks were illegal prior to the 1980s. This type of activity does not stimulate the overall economy in any real way. 
  • Reply 15 of 24
    MacProMacPro Posts: 17,382member
    cornchip said:
    Jeepz. Wish I had bought back at $78. Oh well. Here’s to my IRA...
    I did plonk my entire IRA not AAPL when it was single digits, pre split!  :)
    edited May 2 SpamSandwich
  • Reply 16 of 24
    SpamSandwichSpamSandwich Posts: 29,347member
    Screw the buyback. Buy more businesses which are crucial to Apple's operations and to them completely owning their product, from A-to-Z. How about buying up cell towers to lease back to the cellular providers if they're not going to buy a cellular service provider itself? Or go into business with Elon Musk's satellite Internet based company? Or buy up the mineral and mining operations which extract the rare earth materials used to make the batteries they require?
    Become a conglomerate, spread your management focus thin. That’s the answer.  See... GE.
    GE’s current problem isn’t that they’re spread too thin, it’s that their current management isn’t that good. Give ‘em time, they’ll find the right balance and team eventually.
  • Reply 17 of 24
    GeorgeBMacGeorgeBMac Posts: 2,354member
    Screw the buyback. Buy more businesses which are crucial to Apple's operations and to them completely owning their product, from A-to-Z. How about buying up cell towers to lease back to the cellular providers if they're not going to buy a cellular service provider itself? Or go into business with Elon Musk's satellite Internet based company? Or buy up the mineral and mining operations which extract the rare earth materials used to make the batteries they require?

    I see the buyback as Apple investing in the best tech company in the world.
    Actually, its the opposite.   Instead of investing in their company, whether it be R&D, new or improved production facilities, software development or, whatever, Apple is giving away its capital to stock holders who contribute nothing to the company or its products.

    Although that statement sounds anti-capitalist and will probably be taken that way by many, it is not.  Yes, equity / stock ownership contributes to the capital needed for growth and expansion.   But, in this case, Apple is giving away its own capital those who will invest it in...   say...   an Apple competitor.

    This all started when Carl Icahn became an Apple investor and pressed and threatened until Apple diverted its capital away from the business and to its stock holders.

    In a for-profit organization all bottom line profit ends up in "Retained Earnings".   From there it can be diverted either into (re)investing in the company or in dividends and stock buybacks.  A company only diverts money into dividends when there is no real possibility of a better return by (re)investing in itself.
    ... That's not theory or ideology.  That's just how it works.  
    pslice
  • Reply 18 of 24
    brucemcbrucemc Posts: 1,408member
    "Trickle down"...a strange American term I never understood, and I don't recall anyone who promotes economic growth through private business ever using it...

    Anyways, about the share buybacks, it is important to remember:
    - Corporations are "owned" by the shareholders.  They are not owned by the US gov't, nor (generally) by whiny people on Internet forums
    - The shareholders elect the board, who in turn hires the C-suite executives (or at least the CEO), who are operationally running the company.  
    - When a company makes more cash than their business needs (accounting for R&D, growth, new products, M&A, etc), then that is "free cash flow".  The question is what to do with this.  A company could look at taking on more organic growth (increasing R&D in order to deliver new products), purchase other companies to grow business, or return the cash to the owners of the company - the shareholders.
    - Having too much excess cash on the balance sheet (e.g. just keeping it) is considered a liability for a company (could be wasted in future by SpamSandwich and thus its future value is less than present).

    What is unique about Apple is that they are generating SO MUCH FREE CASH, that they cannot use it all in while "PRUDENTLY" running their business.  Apple's whole corporate DNA is about focusing on a few "great ideas".  You can only spend so much on those.  It takes time, not just money, to bring new products to market.  Just starting a whole bunch of side projects "because we have the money" is how companies lose focus and destroy their long term value.

    Some might argue (legitimately) that Apple isn't doing quite enough on the Mac front, or for s/w quality, or a few other areas.  Perhaps those areas do need more investment.  But in the grand scheme of Apple's excess cash, that is a drop in the bucket.  

    So Apple has given back to the shareholders - over $275B USD in the last 6 years it would seem.  If Apple had not done this, their net cash balance would be over $400B, just sitting on the books.  Let it grow too large, and some hedge fund could (try anyways) to raise money to buy out Apple, since with so much cash it would help with the debt load to buy them, and the cash is not reflected well in the share price.  Then said hedge fund would milk the company for all it was worth and the end would come in a couple decades.

    While share buybacks at most other companies has been considered controversial, as it is perceived as a means to "goose" the share price in the short term (while siphoning off from investment in business, or accruing large debt), that is not why Apple is doing it.  It is the most efficient means for them to return the cash to the shareholders by having each remaining share (those who don't want to sell) have a larger ownership stake in the company.  

    As far as the US tax changes, I won't comment on the personal income tax side, but from a business tax perspective, the US was quite uncompetitive globally in this regard.  And since bringing foreign cash back would result in large tax hit (39% ish) after taxes already paid in other countries, it resulted in large cash balances held outside US.  The recent tax bill brought the overall tax rate down to a competitive level, and reduced the off shore issue by making companies pay its "US share" every year whether they brought the cash home or not.  So it made the decision for Apple to bring home said cash pretty simple - they were going to get taxed on it anyways (simple version).

  • Reply 19 of 24
    pslicepslice Posts: 60member
    pslice said:
    Another example of trickle down - ha! Big business gets tax breaks and they have stock buybacks and increased dividends. We own some stock in Apple, but this is a perfect example of how Trump’s tax cuts aren’t working for Americans. I think this stinks!
    Presumably this comment will also be unceremoniously deleted with prejudice soon.
    Why should my comment be deleted? What needs to happen is that these tech companies work together to bring Broadband to the entire country. We are lucky, where I live, to get 6Mps. I have asked the phone company about the DSL speed being increased, but they won't. I know big business has a conscience somewhere to help everyone. Right now we have the richest in the country getting richer and the price will be paid for by the lower and middle income brackerts. So, not deleting the comment. Apple, Microsoft and all the other tech companies have the where with all to expand tech to everyone instead of increasing dividends. You must be part of the 1%. I'm not, but I do think we all have the right to our own opinion instead of being so pompous.
    GeorgeBMac
  • Reply 20 of 24
    SpamSandwichSpamSandwich Posts: 29,347member
    pslice said:
    pslice said:
    Another example of trickle down - ha! Big business gets tax breaks and they have stock buybacks and increased dividends. We own some stock in Apple, but this is a perfect example of how Trump’s tax cuts aren’t working for Americans. I think this stinks!
    Presumably this comment will also be unceremoniously deleted with prejudice soon.
    Why should my comment be deleted? What needs to happen is that these tech companies work together to bring Broadband to the entire country. We are lucky, where I live, to get 6Mps. I have asked the phone company about the DSL speed being increased, but they won't. I know big business has a conscience somewhere to help everyone. Right now we have the richest in the country getting richer and the price will be paid for by the lower and middle income brackerts. So, not deleting the comment. Apple, Microsoft and all the other tech companies have the where with all to expand tech to everyone instead of increasing dividends. You must be part of the 1%. I'm not, but I do think we all have the right to our own opinion instead of being so pompous.
    It's not the job of the US government to provide Internet service. That's up to the forces of supply and demand. If people choose to live in areas where there is little demand or little chance of profitability for service providers, they won't go there. On the other hand, Elon Musk will be offering satellite-based, low latency high-speed Internet service in the near future.
    edited May 2
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