Apple repurchases $14 billion of its own shares since Q1 2014 results

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Wall Street Journal reports that Apple has bought $14 billion of its own shares in the two weeks since reporting its Q1 2014 (fourth calendar quarter of 2013) results.

Apple had posted revenue of $57.6 billion and quarterly net profit of $13.1 billion, or $14.50 per diluted share in the first fiscal quarter of 2014 (fourth calendar quarter of 2013), compared to revenue of $54.5 billion and quarterly net profit of $13.1 billion, or $13.81 per diluted share in the year-ago quarter.

However, despite selling record number of iPhones and iPads, Apple’s stock fell by over 8% on January 28th. Tim Cook told WSJ that they were surprised by the fall, and wanted to be “aggressive” and “opportunistic.”

“It means that we are betting on Apple. It means that we are really confident on what we are doing and what we plan to do,” said Mr. Cook, speaking in a conference room at the company’s corporate headquarters here. “We’re not just saying that. We’re showing that with our actions.”

Carl Icahn, an activist investor has been putting pressure on Apple to buyback an additional $50 billion of its shares above its current plans.

“You want to be able to adjust for the long-term interest of the shareholders, not for the short-term shareholder, not for the day trader,” Mr. Cook said. “We may see a huge company tomorrow that we want to acquire or something may happen in the stock market that’s unpredictable.” 

Tim Cook also said that though the company has not made any big acquisitions, it was not adverse to the idea of spending billions in buying a company that was the right fit for the company.

“We’ve looked at big companies. We don’t have a predisposition not to buy big companies. The money is also not burning a hole in our pocket where we say, ‘let’s make a list of 10 and pick the best one,'” said Mr. Cook. “We have no problem spending ten figures for the right company, for the right fit that’s in the best interest of Apple in the long-term. None. Zero.”

Tim Cook said that the company will share updates to its buyback program in March or April. Apple had announced a major increase in its capital returns program from $45 billion to $100 billion. Apple has bought back more than $40 billion of its shares over the past 12 months, which is the highest for any company in a similar time span.

In case you’re wondering, when a company spends surplus cash buying back its own stock on the open market, it reduces the overall share count. That gives every remaining investor a slightly bigger proportionate stake in the company. With a lower share count, earnings per share increases.

[Via WSJ]