Apple (NASDAQ:AAPL) steps up to report earnings tomorrow after the close. Of course, the headliners will be things like iPhone unit sales and gross margins, but what about Apple's share repurchase activity? The Mac maker has committed to an aggressive capital return program that is heavily weighted toward buying back stock.

The magnitude of Apple's share repurchase authorization is nothing short of breathtaking: Apple increased the total authorization last quarter to $90 billion, after completing the majority of the previous $60 billion total authorization ahead of schedule.

In fact, Apple's repurchases have largely driven the growth in earnings per share in recent quarters. For instance, net income increased 7% last quarter, while earnings per share jumped 15%. That's what I call accretion.

2 pictures are worth $46 billion
This is how the outstanding share count used in calculating diluted earnings per share has dropped since Apple initiated stock buybacks. The 7-for-1 split occurred during the June quarter, so I'll use pre-split figures for now.

Source: SEC filings. Figures shown on a pre-split basis. Calendar quarters shown.

Let's look at Apple's historical repurchase activity to set investor expectations about the June quarter's buybacks. The company had repurchased $46 billion in stock through the end of March. Apple occasionally uses accelerated share repurchase, or ASR, programs to supplement open market purchases.

Source: SEC filings and conference calls. Calendar quarters shown.

ASR programs take time to run their course. Apple's current $12 billion ASR program will conclude by this December, so don't expect any more ASR programs until 2015. Instead, investors should look at open market repurchase activity. Apple has slowly ramped up its open market repurchases, from $4 billion in Q2 2013 to nearly $6 billion last quarter.

Still undervalued?
Here's the interesting thing though. Back when Apple was in the dumps and it was painfully obvious that shares were undervalued, it made plenty of sense to be aggressive in buying back stock. After all, that's partially why Apple initiates ASR programs (the most recent one was done in response to the January earnings sell off).

Yet, as shares have recovered in the past year and are approaching all-time highs again, the valuation theoretically becomes less compelling. Apple has not dampened its open market buybacks despite its recovery. That suggests that management still considers shares undervalued. It's probably worth noting here that companies aren't generally good at timing buybacks though.

Apple's average stock price during the second quarter was $85. If Apple repurchased $6 billion in stock around that average price, that would retire over 70 million shares (post-split). What were we saying about earnings accretion?