A company can earn the same amount and report more earnings for each share if fewer shares are outstanding. The reason is division. Earnings per share relates the period’s earnings to a weighted average count of shares. A repurchase can affect that count, while the company’s earnings can change for other reasons.
Separate the purchase from the per-share result
Imagine a fictional company earns $90 million and has an average of 90 million shares for the period. That is $1 per share. If it earns the same amount in a later period with an average of 81 million shares, the ratio rises to about $1.11. The illustration holds earnings constant to show the denominator effect.
The average matters because a purchase near the end of a year has less time to affect that year’s share count than an equal purchase near the beginning. Companies may also issue shares during the year. Compare the share count in the earnings-per-share note with the purchase figure to see how the measures differ.
Read Apple’s 2024 disclosure
In its annual report for the year ended September 28, 2024, Apple said it repurchased about 499 million shares for $95.0 billion. It separately described the $110 billion program authorised in May 2024 and reported how much of that program it had used by year-end. Total repurchases during the year and spending under one particular authorisation cover different groups of transactions.
Apple’s earnings note reports weighted average basic shares of about 15.344 billion in fiscal 2024 and 15.744 billion in fiscal 2023. Net income fell from $96.995 billion to $93.736 billion. Basic earnings per share moved from $6.16 to $6.11. In this case, fewer shares in the denominator accompanied lower earnings and a small decline in basic earnings per share.
Follow the evidence in a filing
Look for the repurchase note, the cash-flow statement and the earnings-per-share note. Record the period for each amount. The SEC’s guide to financial statements distinguishes company earnings and the movement of cash, which helps when reading a buyback. Read basic and diluted earnings per share on their own terms. The diluted figure can incorporate potential shares, such as the share-based awards Apple describes.
Sources & further reading
- Apple fiscal 2024 Form 10-K
The shareholders’ equity and earnings-per-share notes report purchases, authorisation, profit and weighted share counts.
- SEC beginner’s guide to financial statements
Explains how the income statement, per-share figures and cash-flow statement relate.
Method & limitations
Uses the two fiscal years in Apple’s 2024 Form 10-K, with share counts converted from thousands to billions and rounded for readability.