losangelesnewstoday.com May 20, 2018

Apple's Humongous Buybacks Went Into High Gear Last Quarter

03 May 2018, 02:10 | Kristen Gross

Cole Bennetts Getty Images

Cole Bennetts  Getty Images

Apple also predicted revenue of US$51.5 billion to US$53.5 billion in the June quarter, and the share repurchases in the March quarter drove Apple's cash net of debt down slightly to US$145 billion.

Wall Street analysts have praised the work Apple has put in to developing its other businesses away from the iPhone.

The amount Apple spent buying its shares in those three months exceeded the stock market value of most companies in the S&P 500 index, including household names like Kroger Co, Best Buy Co Inc and Hershey Co. Celebrated Apple analyst Ming-Chi Kuo shocked many in January by saying that the company would cease production of the tenth anniversary model by the middle of this year.

Apple bought US$23.5 billion of stock in the March quarter, and said it planned to hike its dividend 16 per cent, compared with a 10.5 per cent increase past year.

That came on top of $22.8 billion in buybacks executed in the prior quarter, "a record amount for any issue in any quarter", analyst Howard Silverblatt said. The company now has 270 million paid subscribers across applications and its own services, up by 100 million from the same period a year ago.

Operating expenses are expected to come in at $7.7 billion for the third quarter.

Those two forces pushed up Apple shares by 4 percent after hours.

The $US1,000 iPhone X - Apple's most expensive iPhone - was the best-selling phone "every week" during the quarter, Cook said.

Apple has been emphasizing its contributions to the US economy in recent months, outlining a $30 billion USA spending plan and highlighting the tens of billions of dollars it spends each year with US -based suppliers.

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Investors have also anxious that Apple's influence in China, the company's No 2 market, is waning amid stronger competition from Chinese rivals. This year it looks like Apple may leave its fans without any such support. It was being speculated that the 1000 dollar price which is approximately Rs. 66,700, of the new iPhone will result in a decline of sales of iPhone.

Despite that, Apple said it sold 52.2 million iPhones during the quarter, representing an increase of 3% from a similar period in 2017.

At least four brokerages raised their price targets for Apple stock. That included iPhone sales growing 14% to $52.2 billion and met the average analyst estimate.

"I think it's one of those things where a team wins a Super Bowl", explains Cook.

With some $61.1 billion in revenues, Apple has reported its best quarter March. The App Store, Apple Music, iCloud storage and Apple Pay all generated record sales, Cook said.

Wall Street's belief that Apple will pass along most of its cash to shareholders has helped bolster its stock, even though its latest iPhones haven't spurred as much sales growth as most investors hoped.

He also downplayed talk that the smartphone market lacks significant room for growth, saying tremendous upside still exists in key markets in India and more broadly among the large population that still has not bought the gadget.

"China, I continue to believe is a phenomenal country with lots of opportunity from a market point of view, but also lots of opportunity from an app developer's point of view", Cook said during the earnings call.

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