They've already used most of the existing $10 billion. Only $50 billion is new. That will buy back 120 million shares over the next 11 quarters but they are also issuing a lot of new stock. Currently it's about 3 million shares per quarter or 33 million over the buyback period. Net change is about 87 million shares at current pricees or 9% of the shares outstanding. Considering they just delivered a (-18%) quarter WITH the buyback and the pace will only double, we are merely looking at a slight slowing in the rate of decline. Also note they are guiding to (-23%) for next quarter also accounting for the increased share repurchase.
The current buyback pretty much covers the option grants. This 500% increase will lower the float as much as 15% at current prices. That will add to earnings by the same percentage and once the talking heads get there calculators out they will see that. They will also see that Apple is not guiding to lower Revs(but flat revs) in the comming Q YOY. They are guiding to lower margins but if you lose float that will help earnings. I am already seeing 8.50 and that is not the terrible guidance we are hearing about.
This has always been a second half story and now with the Howitzer buyback the earnings starting in fiscal Q4 will start to show growth again and who knows China Mobile could blow everything UP.
Here's some math for you. What is bigger as percentage the decrease in EPS or the decrease in shares outstanding? I know, I know, math is so hard. Look for EPS to drop 30% yoy next quarter...30%...that is huge. They could buyback all 150 million shares tomorrow and the EPS would still be dropping 20%. Why do you think the price dropped back down? Initial EPS projections for 2013 were in the $48 range...now they are down to $40. If this continues, buybacks or not the future it dim.
Ask yourself, why they would increase the buyback 500%...it's panic...they know what is coming. A desperation move to offset the declining EPS. Only a new product will turn the story around.
you do realize markets reward growth in eps not from shrinking the float but by growing revenues right?
look for 350 or less in the near term without killer new exciting products just refreshes of old.
samsung is kickin the stuffing out of the core of aapl