Apple's 100 billi USD stock redempti program explained

Apple announced a new US $ 100 billi stock repurchase program during the company's quarterly earnings report. It is the largest share buyback program in the history of the company and is part of the $ 210 billi stock repurchase program. # 39; Apple. Apple also announced an increase of $ 0.10 per share of its quarterly dividend, an increase of 16%.

Apple's old return program

Apple already had a huge stock buyback program in place, a $ 210 program that was originally due to be completed in March 2019. Apple has instead accelerated this program, which should be completed by the end of June this year, three quarters earlier. As part of this accelerati, Apple's chief financial officer, Luca Maestri, said during the secd quarter cference call with analysts that Apple had repurchased more than $ 23.5 billi in the quarter ale from March ale. This included the retirement of 137 milli shares of AAPL.

This $ 210 billi stock repurchase program was part of a larger capital return program of $ 300 which includes dividends. All in all, Apple has completed $ 275 billi of the larger program.

A note: AAPL shares languish for most of the March quarter, falling in recent weeks persistent and inexplicable rumors that the iPhone X has been a failure. This, despite the fact that the iPhone X has been the number e selling iPhone since its release. What I mean, however, is that Apple has injected some $ 23.5 billi into the markets during the last quarter, thus buying the rumored products. The title would have probably dropped a lot more without the aggressive buybacks from Apple during the quarter.

The new share repurchase program and the increase of Apple's dividend

Apple would start running the new $ 100 billi program from the mth of June. Luca Maestri pointed out that the size of the program is unprecedented – although less important than existing programs, no company has announced a single share buyback program of this size at a time

"Given the unprecedented size of this new authorizati," Mr. Maestri said, "We want to be particularly thoughtful and flexible in our approach to repurchasing shares.Our intenti is to execute our program effectively and efficiently. at a fast pace. "

Although the company has not set a specific time frame for spending that $ 100 billi, it will start in the June quarter, even though the company is winding up. to its previous share buyback authorizatis. If the last quarter is an indicati, Apple could snatch tens of millis of shares in the market over the next 4-5 quarters.

This adds up to the $ 3.7 billi in dividends that Apple will pay each quarter. In total, Apple is about to spend up to 14.82 billi dollars over the next year in dividends. That's more than Walmart earned in 2017 and not quite twice the profits of Exx Mobil in 2017.

The $ 0.10 to $ 0.73 per share increase announced by Apple will be payable as of May 17, 2018 to shareholders of record in May.

Tim Cook's Comments the Tax Reform

In his opening remarks, Cook attributed part of his company's aggressive return program to the Trump tax reducti of 2018:

Tax reform makes it possible for us to execute our program more efficiently, both for stock repurchases and the payment of dividends to tens of millis of investors who own Apple stock, either directly or indirectly. indirectly, large pensi funds to people with a retirement account.

Given our strg cfidence in Apple's future, we are announcing a significant update to our capital return program. Our board of directors has approved a new share buyback of $ 100 billi, as well as a 16% increase in our quarterly dividend, as of our next dividend payable later this year. mth.

Luca Maestri emphasized these points. ] * In the interest of full disclosure, the author holds a tiny, almost insignificant, share of the AAPL stock that did not influence the creati of this article.

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