Apple buyback 'biggest in history'
On Tuesday, it announced that it plans to more than double its program to return cash to shareholders through stock buybacks and a higher dividend, spending a total of $US100 billion in cash on the effort to the end of 2015.
Its share repurchases alone will increase to $US60 billion from the $US10 billion it had previously committed, the largest such plan in history.
The move to rekindle its relationship with investors came as Apple announced its first profit decline in a decade. The company said its net income fell 18 per cent, as one of the most successful technology franchises in recent years, the iPhone, showed signs of slowing and other, less profitable products began to make up more of its sales.
The rarity of Apple's decline in profit, which was expected, underscores how one of the more remarkable winning streaks in business has ended, at least for now. Investors have battered the company's stock for months, sending its shares down from their peak of more than $US700 a share.
In regular trading on Tuesday, Apple shares rose nearly 2 per cent to close at $US406.13, and they were up to about $US425 in after-hours trading as investors reacted to the quarterly earnings news.
One of the biggest questions facing Apple is whether the company can innovate its way out by delivering a breakthrough new product, perhaps in a category such as television.
Apple provided no detail about its plans on Tuesday, other than the vague hints it often shares about new products to come. "Our teams are hard at work on some amazing new hardware, software and services and we are very excited about the products in our pipeline," chief executive Tim Cook said.
For the second quarter to March 30, the company said its net income dropped to $US9.55 billion, from $US11.62 billion during the same period a year earlier.
Revenue rose 11 per cent to $US43.6 billion, from $US39.19 billion a year before. New York Times
Frequently Asked Questions about this Article…
Apple said it will more than double its cash-return program, committing a total of US$100 billion to buybacks and a higher dividend through the end of 2015. Its share repurchases alone will increase to US$60 billion from the US$10 billion previously committed — described in the article as the largest such plan in history.
The company unveiled the bigger buyback and higher dividend after reporting its first profit decline in a decade. The article says the move was meant to rekindle Apple’s relationship with investors after net income fell and the stock had been under pressure.
For the quarter to March 30, Apple’s net income dropped 18% to US$9.55 billion from US$11.62 billion a year earlier. Revenue, however, rose 11% to US$43.6 billion from US$39.19 billion in the same period a year before.
According to the article, Apple shares rose nearly 2% in regular trading to close at US$406.13 and were up to about US$425 in after‑hours trading as investors reacted to the quarter and the expanded cash-return plan.
The article notes one key concern is the slowing of the iPhone, which has been a major profit driver, and that lower‑margin or less profitable products have started to make up a larger portion of sales — factors behind the rare decline in profit.
No. Apple offered only vague hints about future products. CEO Tim Cook said teams are working on new hardware, software and services, but the company provided no specific details about potential breakthrough products such as a television.
The phrase refers to the scale of Apple’s announced increase in share repurchases — boosting its buyback commitment to US$60 billion from US$10 billion — which the article describes as the biggest share‑repurchase plan on record at the time.
The article frames the US$100 billion program as a way for Apple to return cash to shareholders through buybacks and a higher dividend. While the piece doesn’t give investment advice, it notes investors reacted positively in the short term, sending the stock higher after the announcement.
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