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Apple (NASDAQ: AAPL) released its second quarter financial results after market close on Tuesday. The company's best-in-class revenue and earnings per share were put in the spotlight. The record quarterly sales figure and strong growth of the company's iPad and Wearables segments have helped moderate the year-over-year decline caused by lower iPhone sales. .
However, beyond the financial results of the period, Apple's new annual increase in its return on capital program has been interesting. The tech giant has approved a new dividend increase and allowed more money for the share buyback.
The following is an overview of the updated Capital Return Program.
Source of the image: Apple.
More money for shareholders
Marking its seventh annual dividend increase since Apple paid the dividend in 2012, the technology giant has announced a 5% increase in its annual dividend. Although the increase is small, it adds to a sharp increase in the dividend of 16% last year.
The new quarterly dividend is $ 0.77 and is payable on May 16 to shareholders of record at the close of business on May 13. This new dividend of $ 3.08 a year provides a 1.5% equity return to Apple 's stock. price following the release of the second quarter financial results of the technology giant.
Apple's board of directors has also announced a significant increase in its share buyback program. "Given our confidence in Apple's future and the value of our shares, our Board of Directors has authorized the granting of $ 75 billion of share buybacks. "said Luca Maestri, chief financial officer of Apple. Although this amount is less than the $ 100 billion authorized last year, it is nevertheless remarkable because it is an additional authorization, not a replacement.
Apple wants to become neutral in net cash
Luca Maestri, Apple's CFO, recalled when announcing the results of its second quarter that its goal was still to reach a neutral cash position over time. This means that Apple may want to have an equal amount of debt and cash.
With $ 113 billion in net cash at the end of the second quarter of its fiscal year, it will take some time for this figure to decrease. But the company is making progress in achieving this goal, while Apple has returned more than $ 27 billion to its shareholders in the form of redemptions and dividends during its second fiscal quarter, during which time cash -Flow of operation was 11.2 billion dollars. Apple's net cash position is down from $ 130 billion at the end of the first quarter of its 2019 fiscal year.
It's unclear when and how Apple will reach a net cash neutral position over time. But more redemptions over the next 12 months, Apple paying a higher dividend, will likely bring the technology giant closer to its target.
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