Apple buyback 'biggest in history'
Apple has found an investor that hasn't lost faith in its prospects: itself.
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