Apple announces largest share buyback worth $110 billion

Apple shares rose 7% in extended trading after the company reported earnings for the previous fiscal quarter. Therefore, Apple's board authorized an expanded share repurchase program.

About Apple's profit decline

Apple's quarterly revenue fell, but less than analysts expected, and CEO Tim Cook said growth would resume in the current quarter.

The report shows that Apple's fiscal second-quarter revenue fell 4% to $90.8 billion, beating analysts' average forecast of $90.01 billion. The company also reported net income of $23.64 billion, or $1.53 per share. which is 2% less than a year earlier.

iPhone sales fell almost 10% to $45.96 billion, indicating a decline in demand for the current generation of smartphones released in September. Cook noted that without accounting for sales growth last year, revenue would have remained the same.

Mac sales increased 4% to $7.45 billion, but they were still below the segment's record high set in 2022. Cook noted that sales growth is due to new MacBook Air models with an updated M3 chip.

Sales of other products, including the Apple Watch and AirPods, fell 10% to $7.9 billion. During the quarter, Apple introduced a new product category, the Vision Pro virtual reality headset. However, sales of this $3,500 device are expected to be low, especially compared to Apple's main product lines.

iPad revenue fell 17% to $5.6 billion as Apple hasn't launched a new iPad model since 2022. Apple is expected to unveil new iPad models on May 7, which should stimulate demand for the product line. During a call with analysts, Apple Chief Financial Officer Luca Maestri said the company expects iPad sales to double-digit growth in the current quarter compared to the same period last year.

The company's services business showed significant growth during the quarter. Sales increased 14.2% to $23.9 billion, which includes revenue from subscription services, warranties, search engine licensing agreements and payments.

About the repurchase of Apple shares

Apple's stock surge after the report lifted its market value by more than $160 billion, prompting the company to announce that its board had authorized a $110 billion buyback, up 22% from the $90 billion it authorized last year. In addition, Apple said it would pay a dividend of ¢25.

About plans in the field of AI

Additionally, following the report, Cook noted that Apple will soon reveal specific details about its plans for artificial intelligence.

“We continue to be optimistic about our capabilities in generative artificial intelligence and are making significant investments.” 

Tim Cook, Apple CEO

Over the past 5 years, the company has spent more than $100 billion on research and development.