Apple Announces $100 Billion Share Buyback After Beating Profit Expectations

03 May, 2018, 18:35 | Author: Rosalie Gross
  • Apple results to reveal iPhone X problem

In addition, the tech innovator announced a $100 billion share buyback programme after reporting a $145 billion cash pile in the previous earnings report, following the changes to the USA tax system in 2017.

"We expect Apple to report an in-line March quarter, but are cautious into earnings on May 1 due to our belief that June quarter consensus estimates need to be revised lower", analyst Katy Huberty wrote prior to Apple's report. Sales of iPads rose 2 percent to 9.1 million units compared with the same period a year ago, while Macbook sales slipped 3 percent to 4.07 million.

A provision in the package temporarily lowered the taxes that companies pay when they bring cash stashed overseas back to the U.S. That rate was cut to 15.5%, far below the 35% that would have been imposed before.

The company reported revenue of between $51.5 billion and $53.5 billion. What matters is how popular it is, and it is popularity which has made Apple king.

An Apple Music subscription costs $10 a month (except for the family plan), and the number of paying users recently hit 40-million. Apple's stock price bounced almost 4% on the news. But these companies do not gain from Apple's expanding services offerings.

It's also hard to quantify how much of the repatriated money is being funneled to shareholders.

The new buyback programme is the latest in a series of steady increases in Apple's dividends and stock buybacks since its stock split in 2014.

"We still believe that over time every phone sold will be a smart phone, so it seems to us. that's a pretty big opportunity", he said on a call with investors. That pledge implies Apple has $163 billion to spend, in addition to the roughly $60 billion in cash flow that now accumulates annually from its ongoing sales.

There had been increasing concerns about iPhone sales in the run-up to the results.

Over the past few weeks, the prevailing narrative surrounding the iPhone X has been that sales of Apple's flagship device have been underwhelming. Apple sold 52.2 million iPhones, 9.1 million iPads, and over 4 million Macs during the quarter, earning $38 billion, $4.1 billion, and $5.8 billion respectively from these three verticals.

As long as Apple continues to sell about the same number of devices each year - 217-million iPhones, more than 40-million iPads, and nearly 20-million Macs in financial 2017 - it can sell users of these devices a growing list of services that integrate tightly with the hardware.

US technology giant Apple saw its iPhone sales fall short of expectations in the second quarter, according to its earnings report released Tuesday. Revenue climbed 16% to $61 billion.

Pushing Apple to these record numbers was strong demand for its iPhone brand which were up 3 per cent on 2017.

Apple will complete the execution of the previous $210 billion share repurchase authorisation during the third fiscal quarter.


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