Apple announces largest-ever $110 billion share buyback as iPhone sales drop 10%
Source: CNBC
Apple reported fiscal second-quarter earnings on Thursday that were slightly higher than Wall Street expectations, but showed overall revenue down 4%, and iPhone sales falling 10%. Apple announced that its board had authorized $110 billion in share repurchases, the largest in the companys history, and a 22% increase over last years $90 billion authorization.
Apple shares rose 3% in extended trading. Apple did not provide formal guidance, but Apple CEO Tim Cook told CNBCs Steve Kovach that overall sales would grow low single digits during the June quarter. Apple posted $81.8 billion in revenue during the year-ago June quarter and LSEG analysts were looking for a forecast of $83.23 billion.
Apple reported $23.64 billion in net income, a 2% decrease from $24.16 billion in the year-earlier period. Overall sales fell 4% in the March quarter.
Cook told CNBCs Steve Kovach that year-over-year sales suffered from a difficult comparison to the year-ago period, when the company realized $5 billion in delayed iPhone 14 sales from Covid-based supply issues.
Read more: https://www.cnbc.com/2024/05/02/apple-aapl-earnings-report-q2-2024.html
PSPS
(13,649 posts)jimfields33
(16,202 posts)But everyone with a 401K benefits too. Yes a strange situation. I guess stock buyers like buybacks. I dont understand it much. It might help in peoples statements coming out in July if the stock goes up.
Igel
(35,393 posts)Lots of non-hated-people.
Then again, a stock is just a loan that pays dividends.
I know I paid not just interest/dividends on my loans/mortgage, but endeavored to pay them off early.
So I didn't have to continue to pay interest. 6-year-car loan in 3.1 years, 30-year house mortgage in 14 years.
Imagine all the money I screwed the bank and FSA out of. How horrible. I could still be paying my mortgage, my tributary duty to the GSE whose profits go to the Treasury.
Note that had I not paid off my loan/mortgage, as a public school teacher I'd be struggling like my colleagues. Too many say, after getting their minimum $65k/year salary over 24 paychecks, that they pay most of their bills due the day after their check's deposited and still have debt. I'm in a position that I have credit card debt for the last 2 weeks--no more, and no other debt--and siphon funds over a certain amount off to a safety account and then buy short-term T-bills to help fund the Federal government. For a price, called "interest." Current-short-term interest rate was about 5%/year ... but since it's for 8-weeks ... I don't trust house insurance (and we won't talk I-bills), I don't want longer term. For now.
Point: the feds run on financing their debt. Under Clinton, briefly, they ran a surplus and paid down their debt. They "bought back" debt. This was a grand and glorious thing. Now the budgeted DOD budget is insane. Debt financing--I get an infinitesimal bit of that--is larger. Should the feds, like under Clinton, buy back (total) debt or not? If not, what %age of GDP should be paid for interest?
Or do the feds as our proxies just renege on debt--obligations and consequences are meaningless for those who own them, delightful shortchanges for those that think "we" have some honor and our word means something--hurting some foreign countries and lots of pensions, IRAs and other retirement funds, and people like me?
Yeah, yeah, the pain, it hurts.
lonely bird
(1,703 posts)Stock is ownership.
Voltaire2
(13,300 posts)Once upon a time this was illegal.
cstanleytech
(26,373 posts)Voltaire2
(13,300 posts)former9thward
(32,189 posts)They can't be faulted for that.
Roy Rolling
(6,947 posts)The money is not spent altruistically to benefit the planet. Its a necessary expense and a distraction here. Stock buybacks used to be illegal and the practice just gives 401k owners a cut of the action.
It is not the practice of a serious economy from a U.S. political party not serious about laws that benefit the United States. It corrupts.
Voltaire2
(13,300 posts)Yes it has an R&D budget. However that spending has been dwarfed by it stock repurchases, including this massive one and the prior record setting buyback of 100B in 2018.
This sort of 'investment' is extractive, it is literally a disinvestment of corporate resources for short term stock gain. The chief beneficiaries are the corporate officers with enormous stock based option packages.
emulatorloo
(44,279 posts)former9thward
(32,189 posts)Its just math. If a company has 100 million shares outstanding and they sell at $100 then reducing that to 50 million should increase the value of the stock to $200 million assuming the same market capitalization.
Igel
(35,393 posts)it's like saying that since I paid off my car loan and my house mortgage early--and pay off my credit card debt each month--I'm "disinvesting in the economy."
(Of course, the par value ignores market valuations.)
Note that since I now have excess cash I've taken to investing it in short-term T-bills. And am helping to fund--for a price--the federal debt.
It would obviously be "disinvesting" if the federal government, as it did under Clinton (the traitor?), to (D) braggadoccio to this day, "disinvested" by reducing the national debt.
Debt payment is good. I guess. (?)
cstanleytech
(26,373 posts)former9thward
(32,189 posts)Companies issue stock and new stock all the time. Is that artificial? No.
cstanleytech
(26,373 posts)former9thward
(32,189 posts)It is a simple math equation. All people buying or selling stock knows it.
hueymahl
(2,515 posts)But the this helps to line the pockets of Warren Buffet without him having to pay tax, so there is that.
brooklynite
(95,087 posts)And Warren Buffet isn't "richer" until he sells his shares.