(FinancialPress) — Apple‘s (AAPL) earnings report was released this week – and it was a massive hit with investors. The company announced that its capital return program will get extended. Dividends will be increased by 16% and Apple will buy back $100 billion of its own stock.
With the new tax legislation imposed by the Trump administration settled, the Steve Jobs-founded company will now aim to hold zero net cash. Its current reserves stand at approximately $270 billion. Excess cash will go to dividend payment to investors and share reacquisition, in addition to expansion and capital injection into product development.
The news was welcome by the market, sending the stock soaring a full 4% in aftermarket trading. The results casted a stark contrast from the grim expectations held by analysts at large.
When companies reacquire their own shares, share prices rise as there is a lower supply in the open market. Ultimately, this means more money for shareholdings that decide to hold onto their stocks.
With the 16% increase in dividend payments, the EPS to be paid on May 17 rose to $0,73.
Apple‘s excess holdings come from the astounding cash flow it enjoys. Even after costs of operational costs research & development and capital maintenance, there is still billions left availables to distribute among shareholders.
Apple has returned a whopping $275 billion to investors since it first rolled out the capital return program it has in place back in 2012. The plan is reviewed and adjusted every year
To date, Apple has returned $275 billion to shareholders since it began its capital return program in 2012. Apple reviews its capital return and dividend plans annually.