Led by Apple stock and Google stock, technology companies repurchased more shares in late 2020 as blowbacks against stock buybacks eased. In early 2021, though, financial companies led by banks are emerging as top spenders in corporate buybacks.
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Apple (AAPL) and Google-parent Alphabet (GOOGL) still have substantial funds left in repurchase programs. Meanwhile, Facebook (FB) recently authorized $25 billion in stock buybacks.
And, internet TV giant Netflix (NFLX) said it’s mulling a stock buyback. Netflix last bought back its own shares in 2011.
Apple bought back $27.64 billion of its own shares in the December quarter, its first for fiscal 2021, according to Standard & Poor’s. That’s up from $17.59 billion in the fourth quarter of fiscal 2020 and $22.08 billion for the first quarter of fiscal 2020.
Apple Stock: Buyback Jumps In December Quarter
S&P’s data includes regulatory filings. When Apple stock reported its December quarter earnings, its buyback figure was smaller than that of S&P. It noted $24.77 billion in buybacks through the quarter ending Dec. 26. In all, Apple stock repurchases came to about $81.5 billion for calendar year 2020, about flat with the previous year.
Repurchases of Google stock climbed to $31.15 billion in 2020, up from $18.39 billion the previous year.
That includes $7.9 billion in the December quarter. Google has about $15.4 billion remaining in a stock buyback authorization.
Including its new $25 billion authorization, Facebook has $33 billion to spend on repurchases. The social media giant spent $6.27 billion on Facebook stock buybacks in 2020, up from $4.2 billion a year earlier.
Amid the coronavirus outbreak and a spike in unemployment, some economists last year criticized corporate buybacks as unproductive. Some tech companies suspended stock buybacks in March 2020.
Stock Buybacks Slowed Amid Coronavirus Outbreak
They included Intel (INTC). Tech stock buybacks hit a low in the June quarter, then began rebounding in the September quarter.
Microsoft (MSFT) and Oracle (ORCL) remain big buyers. They repurchased $26.1 billion of Microsoft stock and $18.76 billion of Oracle stock in 2020, respectively. Cisco Systems (CSCO) was among companies that pulled back spending.
For the December quarter, reported information technology stock buybacks are running about 12% over the third quarter and 8% over the fourth quarter of 2019, said Howard Silverblatt, a S&P senior index analyst.
That’s with about 85% of companies reporting quarterly earnings. Overall corporate buybacks are running 34% ahead of the third quarter of 2020 but are down nearly 24% from the year-earlier period.
Banks Buying Back More Stock
However, big banks such as Goldman Sachs (GS), JPMorgan (JPM) and Bank of America (BAC) are once again committing to stock buybacks following regulatory stress tests on their balance sheets.
A Bank of America report said financial companies are leading a rebound in corporate buybacks in early 2021.
Silverblatt has a similar view. “Q1 2021 is experiencing the return of big banks (via Federal Reserve approval), with more non-financial companies starting to venture in to buy shares to cover employee stock options,” he said.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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