In a move that surprised many analysts, Apple Inc. announced its largest-ever share buyback program yesterday, authorizing the repurchase of $110 billion worth of its own stock. This news comes despite the company also revealing a 10% year-over-year decline in iPhone sales for the second fiscal quarter of 2024.
Buyback Bonanza
The $110 billion buyback program represents a 22% increase over Apple’s previous record of $90 billion authorized in 2023. This move signals confidence in Apple’s prospects and is likely intended to boost its stock price. Investors reacted positively, with Apple’s share price rising by over 3% in after-hours trading.
iPhone Sales Slide
However, the news of the record buyback was overshadowed by the revelation of a 10% decline in iPhone sales compared to the same period last year. Apple attributed this drop to a “difficult comparison” with the strong iPhone sales performance seen in Q2 2023. CEO Tim Cook did offer some reassurance, stating that without the inflated sales figures from the previous year, iPhone revenue would have remained flat.
Analyst Reactions
Analysts offered mixed reactions to Apple’s announcement. Some praised the buyback program, viewing it as a sign of Apple’s strong financial health and commitment to shareholder value. Others expressed concern about the decline in iPhone sales, Apple’s flagship product. They pointed to potential factors such as increased competition in the high-end smartphone market and a lack of significant innovation in the latest iPhone models.
Looking Ahead
Apple did not provide any specific guidance for future quarters. However, CEO Tim Cook expressed confidence in the company’s overall outlook, stating that he expects sales to pick up in the coming months. Whether the record buyback can offset the declining iPhone sales and maintain investor confidence remains to be seen. Only time will tell if Apple’s gamble will pay off.
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