Apple Had Relatively Good Earnings and Is up 6% After Hours with $110 Billion in Share Buybacks

14 thoughts on “Apple Had Relatively Good Earnings and Is up 6% After Hours with $110 Billion in Share Buybacks”

1. Has Apple actually “cut” R&D spending?

2. I’m not an Apple shareholder, I only put money in companies that are working towards a path I agree with.
   Their phones lack innovation (like folding screens).
   Spent billions creating an EV, then pulled the plug cause it was too hard.
   Built a AR/VR headset, then priced it into the stratosphere, so not surprisingly sales are hurting.
   AI is booming, and they haven’t released anything in that field.
   Humanoid Robotics is on fire, and nothing from Apple.
   They sit on hundreds of billions, and could help make the world better, but they choose not to.

3. It is a good question for Americans. Do they want criminal psychopathic liar, who is corrupt as hell for the leader, president or not?

   • Hopefully only for another 8 months, then we can finally begin fixing things.

4. My family contributed. Two new iPhones in the family for this quarter, and a 4K Apple TV. And a M2 Mac Air in early January. You’re welcome.

5. …and the Vision Pros are selling well to Enterprise customers throughout Fortune 100 companies – and they are not yet widely distributed/ advertised throughout the World, Apple Watches and iPads have incredible margins with better-than-expected market share/ penetration… iPhones are unstoppable.. Apple is avoiding the pitfalls of several ‘flash in the pan’ companies over the last few months AND last decade, while building a huge cash horde…
   The IBM of consumer electronics… they’ll be a top 10 company long after the NVIDIA, Tesla, METAs, etc., have diminished to second-tier status – though Amazon and Google should persevere Up there…

6. This is symptomatic of American industrial decline. Steve Jobs would be spinning in is grave if he knew the best his successor Tim Cook could come up to do with its profits was to plow them back into buybacks and dividends, instead of inventing new “insanely great” products.
   But Apple is hardly alone. According to economist William Lazonick, over 90% of corporate profits go to stock buybacks and dividends, instead of R&D, training labor, expanding factories, etc. that actually increases operating earnings. https://hbr.org/2014/09/profits-without-prosperity – an old article from 2014, but it’s only gotten worse, and some companies were actually borrowing money to run their operations even to expand, at low interest rates until recently, while still doing buybacks and dividend payouts, which largely benefit the C-suite, whose officers usually own more shares than any other individuals.
   Low capital gains taxes vs. high marginal tax rates for the wealthy, encourages this kind of unearned income. It’s no accident China became the world’s manufacturer, and not just because of low labor costs.
   Nothing will be done because these actions goose the stock market more than revenue growth, and the top 1% won’t give that up and the rest of us can only play along and hope we die before the game gives up.

   • But if they don’t pay dividends, the only way you, as an Apple stockholder, can profit from your investment in their company is to sell the stock, and thus *cease being a stockholder*.

     The share of industrial profit received by capital vs labor is inevitably going to keep increasing, because it’s capital, not labor, that’s actually responsible for the increases in productivity. So the wealth gap between labor and capital keeps increasing.

     The natural fix for this is for everybody to own a share of capital, and become a capitalist, investing some share of their profits back into increased capital. But, *not paying dividends makes this impossible for the average person!* The only way they can actually receive their profit is to stop owning the investment!

     As an analogy, imagine a corn farmer, who plants 1 ton of corn, and reaps 10. Capitalism is for him to only retain 8 tons of corn as gain, and plant 2 tons the next season, so his total production doubles the next year. It works great.

     But, imagine a mutant strain of corn replaces his normal corn, where you plant 1 ton of corn kernels, and reap the exact same number of corn kernels, only they’re bigger. To take any of your gain, you need to plant fewer kernels of corn next year; You’re on a glide path to eventually not planting any corn, if you keep that up.

     Retaining profits instead of paying out dividends sounds great, and it IS great for the single proprietor who pays himself on the side as an employee, the original model of capitalism. But for the publicly held firm, it’s a way of cheating the actual owners of the company, the stockholders, out of their earned profit on their investment.

     And, realistically, where do those retained profits go? The paychecks of the managers deciding the profits ought to be retained…

     • Your view of “labor” is myopic. For starters, labor is us taxpayers. Taxpayers pay for government R&D which generates intellectual property which is then privatized and captured into corporate profit (Dole-Bayh technology transfer). That’s not an investment return. That’s theft with a sprinkling of ideology to disguise it.

       New strains of corn, by the way, come out of the federal land grant A&M college system. Taxpayers do that, then corporate America steals it for a song. We then use I.P. to justify looting other countries through trade treaties. Again, that’s imperialism, not capitalism.

     • The problem is rent-seeking, not increasing capital value by performing R&D, training employees, expanding production facilities etc.
       Basically, Apple is charging a semi-monopolized customer base, then collecting “rent” for using their products and paying mostly themselves.
       Whatever money is paid to average people is offset by not developing new “insanely great” products that could, theoretically, make life better, creating new wealth that society could benefit from.
       Apple also does not pay for so-called externality costs like pollution or land use to the degree of the harm they cause, including in rare earth mining communities (Congo, etc.). That too has to be paid by the taxpayers, or else they take the health and ecological damage hit.

   • Can’t say better about it , that waste of money is crazy , indeed Steve has never accepted this !

   • Preach to the choir, brother!

     Apple’s new buyback/dividend boost amounts to almost exactly twice as much as Congress is spending in the CHIPS act to “reshore” microchip production so that that our semiconductor supply chains won’t be vulnerable in an Asian war. In other words, one company – Apple – could have all by itself reindustrialized Silicon Valley several times over in the last decade but instead chose not to.

     By the way, Warren Buffett’s advice was to buy back your shares IF they were undervalued. Taking buyback spending out of R&D budgets, employee pay and capital expansion creates exactly that type of overvaluation problem because it hobbles long term corporate growth. Think about what Apple could accomplish if it plowed that money back into semiconductor research and manufacturing here in America or spent it on just manufacturing cheap generic drugs at cost. What if it built affordable housing and turned out M4 chips for A.I. server farms? What if it funded cold fusion research – which NASA, MIT and Stanford have now explained but not yet commercialized? What if they invested in a rapid prototyping Tesla/SpaceX-style aircraft and national defense manufacturer?

     Explicit monopolies and implicit ones (e.g., patents and network effects) are strangling the American economy with high costs. Single sourcing and purchasing nodes provide choke points for squeezing customers and easy management/elite looting of corporate resources through gimmicks like buybacks. A recent fight erupted in Congress over the military aid to Ukraine, given that military defense contractors have been spending more on buybacks than on R&D. We can give all the aid to other countries we want to but the fact is after all these years our corrupt war machine still can’t match the artillery shell output of the supposedly more corrupt Russian economy. We should activate the Defense Production Act and take other drastic actions if we want to reshore our supply lines and protect them from China’s growing naval power.

     The theme here is power and profit without accountability. Corporations exist as a legal privilege to their partners, created by statute and they are supposed to follow a creditor chain. In a bankruptcy, assets are divvied up and paid back out from highest tier creditor to the next until the remaining assets are gone. Secured lenders like banks have their loans paid back first, followed by bondholders. Certain obligations for internal R&D/capital investment, suppliers (receivables), employees (pensions), customers (like warrantees) are then paid. Down at the bottom in the chain come common stock shareholders, who are quite often wiped out in bankruptcies because they are unsecured lenders with ownership interest (and thus supposed to be accountable for any failure).

     Paying off common stock shareholders in a bankruptcy above everyone else is a felony called fraudulent conveyance. Outside a bankruptcy, this practice is called a “buyback” – and was once prosecuted as insider trading since that’s exactly what it is. Insiders are manipulating supply and demand for their own stock. Buybacks turn this creditor chain relationship upside down, taking on debt to pay off stockholders in what is essentially a leverage buyout taking the company private.

     But saying “shareholders” really hides the whole scam by adopting the conman’s distracting patter. Buybacks started when executives were issued loads of common stock for “performance incentives.” Yet these executives know the buybacks damage the company so they’re all dumping those shares into the wave of demand created by the buyback. If you’re granting stock to insiders to align their interests with the long-term prospects of the company and buybacks are truly improving those prospects, you’d see insiders BUYING more stock during a buyback. Instead you see the opposite, revealing the lie.

     Essentially in a buyback, corporate insiders are converting corporate revenue into their personal income stream when that revenue should instead be going to debt repayment/capital investment/expansion/R&D/worker pay. Think of that high conversion cost like a fence for stolen goods taking a high cut to move hot jewelry from a thief. The thief gets untraceable cash, but has to take a fraction of the value of the goods because “value” has to be counterfeiting to avoid prosecution. The fence breaks down the merchandise and moves it so that it reappears looking “legitimate.” The corporate executive could hold on to his stock, stop the buybacks and invest in the future of the company but instead liquidates that future for a smaller payout upfront. Think about it like converting your money at a border to “the present” to get it out of the country called “the future.”

     This looting is why American industry has cut R&D, manufacturing, quality control and environmental enforcement by shipping all that overseas in the last fifty years. Buybacks are a small part of it. To see another example of this rabid corporate management parasitism look at the RICO crimes of the National Enquirer as revealed in the ongoing New York trial of Donald Trump. Ignoring its obligation to its readership, the National Enquirer did nothing of the sort to enquire about and reveal the “news” (if you can call that gossip such).

     Instead, Enquirer management both extorted money out of Trump and other “celebrities” using blackmail (“catch and kill”) but then also took bribes from Trump to plant lies about his 2016 opponents. Privatizing the news, in essence, for the profit of management resulted not in more news for readers but less news – as good stories were hoarded – but now also disinformation (for profit, of course, which made it okay).

     As much as I loath the politics of Ted Cruz, he’s an American citizen entitled to equal protection of the law. Planting false stories that claim his family helped kill JFK is essentially an assassination attempt to get Trump’s opponents killed by weaponized psychotics in acts of stochastic terrorism. If you don’t believe disinformation has that effect, I refer you to the most ambitious assassination campaign ever attempted against the Democratic Party by the pipe bomber Cesar Sayoc.

     Not a single indictment has been issued against any Enquirer management involved in this RICO scheme or the owners at the time receiving said profits. The media has expressed no real outrage about this betrayal of readership and the general public interest at large, indicating perhaps the practice of extortion is maybe much more widespread in corporate media they we realize. Trump, I guess, knows it’s fake news because he’s been there faking it from the start.

     Then, of course, Trump continues his old pattern of disinformation warfare, taking comments from a commentator named Waters on Fox to attack the jury – in violation of his gag order, no less. One wonders if there’s a give and take underway between Trump and Fox similar to the one he’s now on trial for with the Enquirer. It’s not like the Dominion case showed Fox is filled with truth-obsessed saints. Oh, by the way. Mr. Waters, false reports that threaten the safety of a jury to direct a preferred verdict is called felony jury tampering. You see that type of activity in organized crime prosecution. Like mafia RICO cases.

     If you don’t first understand the organizing legal principles underlying a free society, you can’t understand how we got here. Which is why defunding civics, legal, political and economic education is so central to the destruction of our democracy.

     • The recent congressional complaints about defense industry buybacks coming at the expense of R&D should not be taken as evidence we’ve turned any corner, nor should Speaker Mike Johnson’s abrupt volte-face on Ukrainian aid.

       This rapacious neofeudal aristocratic looting is part of a larger ideological problem that traces its origins back to the Confederacy. Certain wealthy elements of America’s elite never fully broke away from late feudal England where they were literally worshipped as semi-divine and thus never modernized their thinking. The Confederacy was designed to serve their interests. In this regard, it’s easy to misread Speaker Mike Johnson’s recent embrace of Ukraine aid as some kind of major change, but it doesn’t.

       Speaker Johnson wasn’t standing up to these forces; he caved to pressure from the military welfare network – the very people doing those buybacks and ladling out lobbying bucks and campaign donations. The optics may look heroic since he passed the aid package over objections of the rump segregationist caucus parroting Putinism propaganda. Johnson’s district around Shreveport, Louisiana derives a good deal of its economy from defense production – especially done through those corrupt, buyback-prone private contractors. You can’t make explosives without bayou petrochemicals – and black powder, which is produced from a single corporate source in central Louisiana that experienced a shut down in production lasting well over a year. This has been one of the many bottlenecks in artillery shell production as corrupt monopolies strangle our country.

       Johnson’s recent “intelligence briefings” no doubt drove home the importance of these defense expenditures to the major employers in his district, which in turn affected his reelection prospects. Beyond this self-interest, tales of his “conversion” to reason are vastly overhyped. He’s still an inveterate segregationist trafficking in the newspeak that justifies advancing several confederacy goals:

       1) Resegregating public schools and defunding those that won’t comply. Educational “savings” accounts” will bankrupt the public school budget here in Louisiana just like they’re doing in Arizona. The legislature also plans to personally carve out wealthy neighborhoods into their own school districts, which will just happen to resegregate schools and defund the remaining districts. This is always the problem supporting schools with local property taxes.

       2) Couping. Speaker Johnson stated publicly he had to withhold security video evidence from the DOJ about the January 6th segregationist insurrection until he could blur the faces of the offenders and save them from identification and prosecution. That’s felony evidence tampering, not to mention a disbarable offense for a lawyer and it also disqualifies him from public office because he’s providing aid and comfort to an insurrection after having sworn an oath to the constitution. Trump’s little coup attempt created a vortex in the constitutional order you can’t surf around, though many keep trying. Anyone trying to split the difference in official acts gets sucked into it.

       3) Female enslavement, falsely called “pro-life,” and meant to return the Confederacy’s tools of dispossession back to life. Unlike with soldiers, no salary or medical expenses are provided for these women drafted into the womb wars to “protect innocent life.” Abortion is also being used as an excuse to restrict travel between the states – like it was during the Confederacy where passports were required to cross what were international boundaries between the states. Texas S.B.8 is modeled after Jim Crow bounty hunting the segregate elections, which itself was derived from old slave patrols. Which doesn’t surprise students of history since the arch-segregationist Jerry Falwell is the one who turned to fighting abortion as his rallying cry only after his attempt to resegregate schools was defeated in the courts. (And since you have to first be born to be a citizen – either here in America or abroad and then naturalized – turning fetuses into legal “people” makes them illegal aliens. And, oh, the standard for abortion in the 1780s for the Founding Fathers was essentially the Roe standard; that’s where the conservative Roe court got it – out of Blackstone and English common law. So by its own definition, the Dobbs decision is wrong, wrong, wrong and its false view of historical tradition is yet another product of decades of brainwashing by the anti-Federalist Society whose goal is to abolish federal law and revive the confederacy. Read Nancy MacLean’s book, _Democracy In Chains_. I went to school with the crazies now running the “Republican” party. Don’t gaslight me about who they truly are.)

       4) Mass deportation camps for eleven million non-citizens (one million less than the total number Nazis killed in their camps). Trump has also signaled he will revive the Dred Scott standard because he disagrees with the birthright citizenship amendment in the constitution, so plenty of actual citizens could wind up in those camps too. This is just one example of the targeting of post-Civil War amendments by resurgent segregationist politicians and judges. This isn’t coincidence; it’s a well-thought out and planned pattern of attack by corrupt wealth in America that you ignore at your peril.

       5) An end to open records laws to enable looting of the government by its corporate stooges. This is the great “reform” the new Republican supermajority is pushing in Louisiana (in addition to letting gangbangers carry concealed guns without a permit – you know, to LOWER the crime rate). Many recent public infrastructure development projects (especially sports stadiums) have been shifted into private “partnerships” whose details are already hidden from view, despite the enormous tax incentives they’re getting. Killing open records laws will extend this opacity throughout the remaining public parts of the state budget, including the prison system where recent changes to the law will fill up the beds on the taxpayer dime by essentially revoking parole for good behavior (which prison guards have pleaded against).

       Governor Landry has no support for any of this, but he’s ramming it through with his supermajority because the same “think” tanks behind Trump are paying him. Landry’s grand reform for insurance markets will allow “investors” to loot their reserves more easily and make it harder for defrauded consumers to sue – in essence creating more corporate failures instead of fewer. Akerloff and Romer called this looting “bankruptcy-for-profit.” Expect this type of behavior on an epic scale at the national level should “Republicans” (i.e., the new segregationist planter class) get consolidated federal control.

       This is not a joke or a rant. Rome had the greatest technology of the ancient world and yet its greedy oligarchs destroyed it by sending so many bankrupt borrowers into slavery they eventually ushered in a millennia of legalized enslavement called feudalism. If you care about the development of new technologies because you believe in their power to spread prosperity and improve our lives, you have to pay attention to this parasitism sapping our productivity.

       • TDS writ(ten) large.

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