Apple’s massive buybacks matter as much to investors as iPhone and Mac sales
Monday, April 17, 2023 5:02 pm
When Apple reports fiscal second quarter results on May 4th, one of the most important numbers investors will be watching has nothing to do with iPhone or Mac sales. It’s the amount Apple is allocating for buybacks – share repurchases for the next twelve months.
Subrat Patnaik for Bloomberg News:
For the year ahead, some analysts expect the Cupertino, California-based company to commit $90 billion to repurchases, the same as last year. Apple has historically reported its buyback plans in its fiscal second-quarter results, which are slated for May 4.
For investors, the firm’s buybacks have come to act as “a sign of their confidence in the business,” said Gene Munster, co-founder and managing partner at Deepwater Asset Management. “If something changed unexpectedly on that, it could tarnish their safe-haven status.”
Investors like buybacks because they reduce outstanding shares, boosting earnings on a per share basis and providing a lift to the stock.
In the past decade, Apple has spent $573 billion on buybacks, according to data compiled by Bloomberg, by far the most among US companies. What’s more, the firm’s buying has been relatively steady despite stock market volatility or business cycles.
Apple’s biggest buyback authorization came in 2018 when it set aside $100 billion.
MacDailyNews Take: We predict $90 billion in buybacks and a $0.24 per share dividend.