By Tomi Kilgore, MarketWatch
No shares were repurchased in December, when the stock tumbled 12% and hit a 17-month low
Apple Inc. remained aggressive in buying back its stock when momentum was strong, and prices held above the $200 mark, but when the going got tough for investors, Apple was nowhere to be found.
In a filing with the Securities and Exchange Commission, the technology giant disclosed that it spent $8.24 billion repurchasing 38,024,000 shares during its fiscal first quarter ended Dec. 29, at what amounted to a weighted average price of $216.61.
That compares with the $19.44 billion Apple spent to buy back 92,463,000 shares, at a weighted average price of $210.32, during the sequential September quarter.
Apple (AAPL) broke down the purchases for the December quarter: 31,343,000 shares were bought from Sept. 30 to Nov. 3, at an average price of $219.71; and 6,681,000 shares were repurchased from Nov. 4 to Dec. 1, at an average price of $202.07.
What might disappoint some investors, who may have been banking on continued large share buybacks for support, is the last close above $200 for Apple's stock was Nov. 9.
On Nov. 12, the stock tumbled 5%, after Lumentum Holdings Inc. (LITE) slashed its earnings and revenue outlook after one of its largest customers requested that the smartphone components maker "materially" reduce shipments () for previously placed orders.
Apple's stock continued to slide the rest of November, as a number of other Apple suppliers (), such as Qorvo Inc.(QRVO) and AMS AG (AMS.EB), also followed with warnings of lower-than-expected sales.
Then from Dec. 2 to Dec. 29, when stock tumbled 12% during the month, and closed at a 17-month low of $146.83 on Dec. 24, there were zero shares repurchased.
Since then, the stock closed at a fresh 21-month low of $142.19 on Jan. 3, after Apple cut its holiday sales forecast (), before recovering.
On the post-earnings conference call with analysts after Tuesday's close, Morgan Stanley analyst Katy Huberty asked if the "weaker quarter" was one of the reasons the company bought back so many fewer shares during the December quarter.
Chief Financial Officer Luca Maestri responded by saying Apple always strives to execute share repurchases "in an efficient, effective, I would say disciplined manner," taking into account overall market conditions, according to a transcript provided by FactSet. "So that's what we did during the course of the December quarter."
Does that mean Maestri believed Apple was being "effective" and "disciplined" by buying high, and not buying low?
Although the stock has run up 17% from its Jan. 3 closing low, helped by an upbeat earnings report (), it was still 23% below the price Apple paid last quarter. That implies those shares would now be worth nearly $2 billion less. Read a recap of the live blog of Apple's earnings call ( ).
Including the shares repurchased the previous quarter, Apple bought 130,487,000 shares at a weighted average price of $212.15, which would be worth about $6 billion less at current prices.
Apple stock has lost 0.8% over the past 12 months, while the Nasdaq Composite Index has slipped 1.4% and the Dow Jones Industrial Average has given up 4.5%.
-Tomi Kilgore; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
February 02, 2019 10:39 ET (15:39 GMT)
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