Apple gains on expectations of record capital allocation program due to GOP tax overhaul

“Shares of Apple moved higher Monday on increased optimism that the tech giant could announce a record-breaking boost to its stock buyback and dividend plan when it posts quarterly results this week,” Kate Rooney reports for CNBC. “Apple shares rose nearly 2 percent while the broader market declined. The company had tumbled into correction territory in recent weeks on worries over weak iPhone sales. It reports earnings after the bell Tuesday.”

“The capital return plan is a part of the company’s redistribution of repatriated overseas profits,” Rooney reports. “This year’s GOP tax overhaul took the rate on repatriated cash from 35 percent tax rate to 15.5 percent. Apple said in January it expects to pay about $38 billion in taxes on what it plans to bring back to the U.S., implying that it will repatriate virtually all of its $250 billion in overseas profits.”

“Morgan Stanley analysts expect Apple, which has the biggest overseas bank account of any S&P 500 company, to increase the capital return program by $150 billion,” Rooney reports. “‘This would imply Apple repurchases $210bn in shares and pays $52bn in dividends over the next three years,’ Morgan Stanley equity analyst Katy Huberty wrote in a note to clients in April.”

Read more in the full article here.

MacDailyNews Take: Get ready for the AAPL buyback tsunami!

As always, we’ll bring your the results as soon as they are available (simply check our home page at 4:30pm EDT on May 1st).

We plan to cover the conference call with live notes as usual. That link will appear on our home page around 4:45pm EDT on May 1st.

Analysts expect Apple’s results to show iPhone growth problem and Cook’s plan to fix it – April 30, 2018
Apple to release Q218 earnings, webcast live conference call on May 1st – April 3, 2018


    1. Just like Immelt at GE. He pissed away $24 Billion buying back GE stock and it did nothing for the price and the company now has a deficit of $31 Billion in the company pension plan and they are selling the furniture trying to stave off bankruptcy.

      Stock Buybacks are not efficient and not in the best interest of shareholders. It usually pans out to buying a Dime for a Dollar.

  1. Wall Street consensus has already said this tax windfall won’t count for anything in boosting Apple’s share price. I’m sure they’ve said the entire amount is already priced into Apple stock at the current price.

    Apple is the ONLY tech company that won’t show any share gain benefit from tax repatriation. I fully understand what reducing outstanding shares means but it’s not something that will excite any investors to buy Apple stock. Amazon having a $1B in profit is more valuable to shareholders than Apple having $100B in free cash for share buybacks. It’s an odd thing but then so is the stock market.

    I just wish Apple would be able to stop relying only on the iPhone for major revenue. However, without a major acquisition I don’t think it will happen.

  2. The vast majority of the deficit-ballooning windfall to US corporations is going directly to stock buybacks and executive bonuses. Who knew that America would be great if it increased its debt so that puppetmasters of the Fortune 500 could sit on more cash?

    Let us know when real wages increase in the USA above the rate of inflation, when the federal budget is balanced, or when massively wealthy corporations like Apple take their ill gotten gains and invest it in domestic jobs or develop new products that perform better and cost less. Still waiting for the responsible economic development here.

      1. Tax evasion enabled by a global cabal of lawyers and tax havens is most definitely ill gotten gains.

        The working class and small businesses work hard for their daily bread, why does anyone cheer for the fat cats that inherited a gold mine and continue to prove every day that they have no intention of working to make products great for the customers. They are just playing financial games now.

  3. The numbers that Apple posts are so insanely huge that its hard to comprehend what business they could possibly take on to grow. But they have to aggressively sell phones in China and India and all US Android users. The old “I’m a PC, I’m a Mac” commercials have to be aimed towards Android users. Apple needs to improve Siri, why not go all the way and start a search engine, give users the option to opt in to their own data, most people don’t give a crap about Facebook stealing everything, Google shares would tank, as a trusted company Apple provides the answers their customers needs. Then, do advertising just like google does. Why not. Oh and Buy Netflix and include a TV box that does something that cost less than an actual TV.

  4. Limit freeloaders Google, Netflix, Amazon and Facebook to being just a web app on a browser let them pay the true cost of R&D,


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