Business

Apple CEO to lead $60B stock buyback

Apple is fighting back after Wall Street turned on its stock.

After months of demands for the company to return more cash to shareholders, the tech giant decided the best use of its massive $145 billion money pile is to buy back its own beaten down shares.

Along with quarterly results that beat estimates, the iPhone maker disclosed the largest share repurchase in history yesterday, boosting an earlier $10 billion program to $60 billion.

“We believe so strongly that repurchasing our shares represents an attractive use of our capital that we have dedicated the vast majority of the increase in our capital return program to share repurchases,” Apple CEO Tim Cook said in a statement yesterday.

The unprecedented buyback is part of a plan to return a whopping $100 billion to investors by the end of 2015, or an average of more than $30 billion a year.

“As opposed to just a payout, Apple put its money where its mouth is,” said analyst Colin Gillis with BGC Partners. “They are saying: ‘We believe in this company, and if Wall Street doesn’t want to buy this stock we will.’”

In addition, Apple hiked its quarterly dividend by 15 percent, to $3.05 a share.

The usually calm and collected Cook was fired up during a conference call to discuss results.

While he acknowledged that the share price, which has fallen 45 percent since September, is “very frustrating to all of us,” he insisted that “Apple remains very strong.”

He also seemed fed up with increasingly unrealistic expectations for the company as well as the growing view that its most innovative and high-growth days are behind it.

Cook pointed out that revenue came in at $43.6 billion — topping the company’s own guidance — but that still wasn’t good enough for some.

Apple said it was working on new products and exploring new consumer categories, that some took to mean TVs. Still, Cook hinted the company’s next big product refresh would not come until the fall.

In a closely watched earnings report, Apple managed to assuage some investor concerns despite posting its first drop in profit in years.

Overall, the company reported results that topped expectations:

* Revenue of $43.6 billion surpassed forecasts of $42.3 billion;

* Per-share earnings of $10.09 topped the consensus of $9.98;

* iPhone sales of 37.4 million surpassed predictions of 35.4 million; and

* 19.5 million iPads sold beat estimates of 18.3 million.

However, profit margins of 37.5 percent disappointed compared with the 38.5 percent predicted by analysts.

Also, its revenue guidance of $35.5 billion for the current quarter fell short of forecasts for $38 billion.

Apple shares ended up little changed after rising as much as 6 percent in late trading.