Published: Thu, May 03, 2018
Sci-tech | By Spencer Schmidt

Apple in $100bn share buyback as more money returned to US

Apple in $100bn share buyback as more money returned to US

Apple also will spend $100 billion more buying back its stock, a move that will enrich shareholders by helping to drive up the company's stock price.

Although Apple doesn't break down its iPhone sales by model, it does seem to have sold fewer of the pricier iPhone Xs and more of lower-cost earlier models than Wall Street had expected.

In addition to stronger than expected iPhone sales and double digit Apple revenue growth for the Q, Apple also announced $100 billion in AAPL stock buybacks and a 16% dividend hike.

That came on top of $22.8 billion in buybacks executed in the prior quarter, "a record amount for any issue in any quarter", analyst Howard Silverblatt said. During the same period previous year, the business posted $2.10 EPS.

"We also grew revenue in all of our geographic segments, with over 20 per cent growth in Greater China and Japan", he informed.

Sales of the iPad were also up slightly in terms of units sold and on revenue, continuing a modest resurgence of the company's tablet business.

Apple's stock price rose nearly 4% to $176.57 on Wednesday, at the high end of the price range where it has been mired since early November. Tim Cook told investors that customers chose the anniversary iPhone "more than any other iPhone each week in the March quarter", similar to what they did in December quarter.

Apple has been emphasizing its contributions to the US economy in recent months, outlining a $30 billion USA spending plan and highlighting the tens of billions of dollars it spends each year with US -based suppliers.

Lawmakers have been hoping Apple and other companies would use the overseas cash to create more jobs in the US and spend more on other projects that will help accelerate economic growth.

But investors have had concerns around Apple because of brewing trade tensions with China.

Reports indicate that Apple is developing a new iPhone which will be far cheaper compared to the existing options.

Apple CEO Tim Cook recognised the low share that the smartphone maker has in India, a market where it reported record revenue growth in the first six months of its fiscal year and whose expanding middle class and expansion into 4G offers a strong growth opportunity amid slowing global demand for the devices. So it is not worth to expect that Apple will decrease prices anytime soon.

Thanks to the contribution of iPhone X, revenue from all iPhone models was up 14 percent year on year at US$38 billion.

However, the $999 starting price of iPhone X appears have been too high for some consumers. This the reason why even a slightest of decline in the sales of iPhone causes anxiety amongst the investors.

"I think it's one of those things where a team wins a Super Bowl".

Apple's guidance was also a big relief to investors anxious about iPhone sales. Apple's services business brought in a healthy $9.2 billion revenue in the March quarter, up 31% YoY.

"We believe the availability of Apple Pay at major transit systems has been a key driver of adoption among commuters, and in March we launched Express Transit with Apple Pay in Beijing and Shanghai - the second and third largest transit systems in the world".

Like this: