Tag Archives: apple

How Much Will Apple Raise Its Quarterly Dividend?

During Apple ‘s ( AAPL ) annual meeting last month, CEO Tim Cook said the company was committed to raising its dividend annually. The question of how much that raise will be won’t be answered until next month when Apple reports its March-quarter financial results. Piper Jaffray analyst Gene Munster on Thursday predicted that Apple will raise its dividend by 5% to 10%. “We believe that prior changes in capital return policy are good indicators for what to expect this April,” Munster said in a report. In April 2015, Apple raised its dividend by 11% to 52 cents a share. And in April 2014, Apple raised its dividend by 8%. Apple also is likely to hike its stock buyback plan significantly, he said. “We expect Apple to add $30 billion-$50 billion to its share repurchase program, based on the past two years of the share repurchase program,” Munster said. “This would generate an incremental 5% EPS growth, excluding revenue in each of the next two years.” Last April, Apple increased its buyback program by $50 billion to a $140 billion total. In January, Apple had $30 billion left on its current repurchase authorization, Munster said. “Our model reflects a share count reduction of 3% in calendar 2016, compared to an actual reduction of 5% in 2015,” he said. “We believe the updated buyback would suggest our share count reduction expectations are conservative.” It took Apple 3-1/2 years to repurchase $110 billion in stock of the authorized $140 billion program, he said. “Every 1% in share-count reduction adds about 9 cents to annual EPS, or about 1%,” Munster said. “Assuming a $110 average stock price, that 1% share count reduction would cost about $6.1 billion. In other words, if Apple increases the buyback by $40 billion, and has $20 billion-$25 billion left on the existing buyback, this would increase EPS by 10% if they completed the entire buyback in a year, excluding revenue growth. Most likely, the buyback will happen over a two-year period, generating about 5% EPS growth in each of the next two years.”

Ad-Blocking Jumps To 38% Globally After Apple iOS Move, Report Says

Six months after Apple ( AAPL ) made ad-blocking possible on iOS mobile phones, eMarketer says that the trend is gaining steam. It could mean that companies including Alphabet ( GOOGL ) search unit Google, French ad firm Criteo ( CRTO ) and others relying on advertising to make money aren’t totally in the clear yet, though they’ve said that ad-blocking isn’t having any effect on their business. Worldwide, 38% of Internet users reported using an ad-blocking tool in Q4 2015, eMarketer notes, citing data from research group GlobalWebIndex. The rise comes after the percentage of people using ad-blocking tools had generally held steady earlier in the year — 28% in Q3 and Q2 and 27% in Q1, according to the survey. The U.S. showed the lowest ad-blocking adoption rate — 9% — of six large nations in North America and Europe, according a June survey by comScore and Sourcepoint. At 27%, France posted the highest ad-blocking rate, the survey said. Ad blockers serve to reduce the amount of bandwidth a user needs by cutting down the amount of content — seen and unseen — that a page has to load. They can also help with privacy by blocking programs that track users’ browsing habits — good for users, bad for advertisers who want to show their ads to people who are the most likely to buy their products. “It’s apparent that significant amounts of time are spent viewing ad-blocked video, and that’s the crux of the problem as far as publishers and advertisers are concerned,” the eMarketer report said. About 16% of the U.S. online population blocked Web ads during Q2 2015, according to a report from Adobe Systems ( ADBE ) and PageFair, an Ireland-based startup that measures ad-blocking costs for publishers. Ad blocking could could cost publishers $41.4 billion globally this year, up from $21.8 billion in 2015, according to that study. Last month, news site Wired became the latest publication to charge users who have installed ad-blocking tools. “We know that you come to our site primarily to read our content, but it’s important to be clear that advertising is how we keep WIRED going: paying the writers, editors, designers, engineers and all the other staff that works so hard to create the stories you read and watch here,” Wired told its readers in a post. On any given day, Wired added, “more than 20% of the traffic to WIRED.com comes from a reader who is blocking our ads.” To snuff out any momentum, Wired said that people using ad blockers will not have full access to articles on its site and gave ad-block users two options — either agree to see ads while visiting Wired, or pay about $1 a week for an ad-free subscription. Media firms including NBC will not allow people using ad blockers to watch videos on their sites, while the Guardian and Washington Post newspapers are prodding people who use ad blockers to pay for subscriptions instead. Support for ad blocking built into Apple iOS 9 means that iPhone and iPad users can install ad-blocking services from Apple’s App Store. Those products give people the power to pull the plug on Web advertising that they deem annoying — everything from banner and pop-up ads to auto-play videos. Apple stock was up more than 1% in afternoon trading on the stock market today , near 103. Criteo was up 1%, while Adobe fell 1% and Alphabet was down a fraction. Image provided by Shutterstock .

Apple Chip Supplier Broadcom Nixes Further M&A After Avago Merger

Broadcom ( AVGO ) CEO Hock Tan satisfied querying minds Thursday, claiming that further M&A following the $37 billion merger with fellow Apple ( AAPL ) supplier Avago Technologies is “furthest from our minds at this point.” Top-line growth will slow to 5% in the long term as Broadcom digests Avago , MKM analyst Ian Ing wrote today in a research report. But the merged company’s diversification — which puts wired sales on top — will help offset a wireless trough in Q2, he said. Ing retained his buy rating and boosted his price target to 162 from 160 on Broadcom stock, which was up 7%, around 147, in afternoon trading on the stock market today , touching a 2016 high. For its fiscal Q1 ended Jan. 1 — before the completed Feb. 1 merger — Broadcom late Thursday reported non-GAAP figures of $2.41 earnings per share on $1.78 billion in sales, up 15% and 8%, respectively, vs. the year-earlier quarter. The consensus estimates of 30 analysts polled by Thomson Reuters were $2.30 and $1.75 billion. Current-quarter sales ex items guidance for $3.55 billion at the midpoint was slightly off the consensus model for $3.75 billion. Unlike Q1 figures, Q2 sales reflect the combined Avago-Broadcom company, Tan said on the company’s earnings conference call. Pacific Crest analyst John Vinh credited Broadcom’s 11-cent Q1 EPS beat to $30 million to $40 million in acquisition-related synergies. In total, Broadcom expects $750 million in synergies over 18 months. FBR analyst Christopher Rolland sees Broadcom exceeding that $750 million target. As Broadcom looks to shed smaller business units, the chipmaker expects to reduce quarterly operating expenses by $80 million. For the April quarter, Broadcom guided to $832 million in op-ex, below the consensus for $944 million, Ing wrote. Wired sales are expected to comprise 55% of Q2 revenue, leading wireless, enterprise storage and industrial sales at 23%, 17% and 5% of sales, respectively. The expectations flip Q1 results, where enterprise storage sales led with 38% of total revenue. Wireless, wired and industrial contributed 32%, 22% and 8%, respectively. During Q1, strong enterprise storage sales helped offset a 15% sequential decline in the wireless segment, Tan said. Wireless sales fell on wavering Apple iPhone demand, despite Samsung’s Galaxy 7S ramp-up, but Tan expects to increase Broadcom’s iPhone 7 content by 20%-plus after Q2. “Despite weaker-than-expected Q1 iPhone builds that have weighed on the entire Apple supply chain, Broadcom not only maintained its full-year RF (radio frequency) growth forecast, but raised it,” Rolland wrote. Rolland maintained his outperform rating and 185 price target on Broadcom stock. Vinh rates Broadcom stock as overweight and has a 170 price target. Shares of fellow Apple suppliers Skyworks Solutions ( SWKS ), NXP Semiconductors ( NXPI ), Qorvo ( QRVO ) and Cirrus Logic ( CRUS ) were up a respective 6%, 5%, 3% and 2% in afternoon trading Friday, after Broadcom’s Q1 earnings.