Apple Inc. to Add $30B to its Buyback Program
Apple Inc. (NASDAQ:AAPL) is set to have its conference call discussing its second fiscal quarter financial results on April 23, 2 p.m. PT / 5 p.m. ET.
Analysts at Bernstein Research predicts for the company to add $30 billion to its buyback program in response to its shareholders' demand "for Apple to provide a framework and commitment for capital return."
In a research note obtained by MarketWatch of The Wall Street Journal, Analyst Toni Sacconaghi said Apple will increase "its commitment to its existing buyback program."
"We believe that Apple may add $30 billion to its current repurchase plans through yearend calendar 2015," Sacconaghi wrote.
Apple reportedly plans to buy $60 billion of its outstanding shares by last quarter of 2015, MarketWatch reported.
The company had already purchased $45 billion to $50 billion out of the $60 billion plan, Sacconaghi said.
During Apple's announcement of its first quarter 2014 financial results, it provided its guidance for its fiscal 2014 second quarter as follows:
- Revenue between $42 billion and $44 billion
- Gross margin between 37 percent and 38 percent
- Operating expenses between $4.3 billion and $4.4 billion
- Other income (expense) of $200 million
- Tax rate of 26.2 percent
For its first quarter of 2014, the company gave cash dividend of $3.05 per share of the company's common stock.
"We generated $22.7 billion in cash flow from operations and returned an additional $7.7 billion in cash to shareholders through dividends and share repurchases during the December quarter, bringing cumulative payments under our capital return program to over $43 billion," Peter Oppenheimer, Apple's CFO, said.
The success of Apple Inc.'s first quarter was attributed to record sales of iPhone and iPad.
"We are really happy with our record iPhone and iPad sales, the strong performance of our Mac products and the continued growth of iTunes, Software and Services. We love having the most satisfied, loyal and engaged customers, and are continuing to invest heavily in our future to make their experiences with our products and services even better," Cook said.
With the rumored large screen iPhone 6, iWatch and iTV, Bloomberg saw more bullish options for Apple than bearish ones.
According to the data compiled by Bloomberg, there were 1.22 million calls for the right to buy the stock. This is 40 percent more than calls putting to sell the stock. Eight most-owned contracts were also bullish, with calls betting to a 9 percent increase of Apple's stock price by April 19 to $590.
As of April 16, based on real-time data quote published by NASDAQ OMX, Apple stock quote is at $516.33 down by 0.31 percent. Previous close is at $517.95. Today's high is at $521.09, low at $514.13. The 52-week high is at $575.13 and low at $385.10.