Apple's AAPL +1.81% buyback activity may not be enough for Carl Icahn, but during the fourth quarter of 2014, it was good enough to top the S&P 500. According to a new analysis from financial research firm FactSet, Apple spent more in buybacks than any other S&P company — even as year-over-year buyback spending for the overall index declined.
FactSet reported Tuesday that during the fourth quarter, aggregate share buybacks by S&P companies totaled $125.8 billion, down 4.4% compared to the same time in 2013 and down 13.5% over buybacks in the third quarter of 2014. Overall, 362 companies — 72% of the index — participated in buybacks during the final quarter of the year, a figure that is consistent with the average participation rate over the past five years.
On a company-by-company basis, Apple’s $6.1 billion in share repurchases during the quarter was the most of any company on the S&P. This figure marks a 20% increase year-over-year but a 64% drop quarter-over-quarter.
“In the previous quarter, Apple spent the second-largest dollar amount on share repurchases by an individual company in the S&P 500 since 2005 at $17 billion,” FactSet analyst John Butters wrote in the report Tuesday. “Over the past three quarters, Apple has spent $16.9 billion on share repurchases on average. As a result, on a trailing 12-month basis, Apple has now spent the highest amount on buybacks, $57 billion, of all the companies in the index.”
For perspective, that $57 billion spending total is four times higher than the next-highest total: the $13.4 billion IBM IBM -0.19% spent in buybacks over the same period. Behind Apple and IBM is Exxon, with its $13.2 billion in buybacks over the trailing twelve months, Intel, which spent $11 billion over the same period, and Wells Fargo with $9.1 billion.
While Apple did lead the index in overall spending during the fourth quarter, its $1 billion year-over-year increase in spending was not the largest in the index. Intel INTC -1.05% — whose $4 billion in buyback activity during the quarter was second only to Apple — increased its spending by $3.5 billion. Johnson & Johnson JNJ -1.17% increased its buyback by $2.3 billion, while Wells Fargo and Yahoo both increased theirs by $1.9 billion.
But of course, since overall buyback activity did dip 4.4% year-over-year, more sectors decreased their buyback than increased it. Seven of the S&P’s 10 sectors recorded a decrease in share repurchases, with the 95.8% drop in telecomm buybacks the largest plunge of the pack.
“This sector has not historically been a large spender on buybacks, which makes it susceptible to large swings in quarterly growth rates,” Butters explained. He went on to add that “most of the decline in this sector can be attributed to AT&T, which spent nothing on buybacks in the fourth quarter of 2014 compared to $1.9 billion in the fourth quarter of 2013.”
Other companies scaling back their share repurchases during the quarter were IBM (which decreased spending by $5.9 billion), Pfizer (which saw a $3.9 billion drop), Cisco (down $2.8 billion), and General Electric (down $2.2 billion).
Apple is up 1.75% in Tuesday trading, though not because of FactSet’s buyback analysis: to the delight of cord-cutters around the country, the Wall Street Journal is reporting that the company isclose to offering a web-only TV service. Year-over-year, Apple stock is up 67.5%.
