Apple Q4 Results
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Apple Q4 Results
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Re: Apple Q4 Results
#2What exactly is the advantage of reaching a cash neutral position? If you are a company that can reliably do that does that mean you no longer have to grow — since your investors are primarily attracted to a reliably stable ability to generate dividends?
Re: Apple Q4 Results
#3MacStories and Six Colors created graphs comparing the data from this quarter to past quarterly results
https://www.macstories.net/news/apple-q4-2019-results-64-bil...
https://sixcolors.com/post/2019/10/apple-results-64b-in-reve...
Re: Apple Q4 Results
#4MacStories and Six Colors created graphs comparing the data from this quarter to past quarterly results https://www.macstories.net/news/apple-q4-2019-results-64-bil... https://sixcolors.com/post/2019/10/apple-results-64b-in-reve...
What terrible charts.
I won't go through it line by line but why highlight Q1 vs Q4 instead of prior year Q4 vs current period Q4 (ie, year vs year).
Highlighting periods with holiday sales against current nonholiday periods is ridiculous.
Re: Apple Q4 Results
#5What exactly is the advantage of reaching a cash neutral position? If you are a company that can reliably do that does that mean you no longer have to grow — since your investors are primarily attracted to a reliably stable ability to generate dividends?
They have cash that they don’t use neither for operations nor for investments. It is inefficient. Reaching net cash neutral position would mean that all assets are used in the most productive way.
Re: Apple Q4 Results
#6What exactly is the advantage of reaching a cash neutral position? If you are a company that can reliably do that does that mean you no longer have to grow — since your investors are primarily attracted to a reliably stable ability to generate dividends?
As the owner of a company (a shareholder) it is desirable because if your company isn't in the business of capital allocation then excess cash accumulation is reducing their ROE and your ROI.
And yes, the company still has to grow. But as a company executive you are viewing existing and new business opportunities through their net present value. If you don't have business opportunities that meet the thresholds you have in place for a project, then extra cash serves no purpose.
This ignores a whole bunch of complicated other stuff (stress testing capital requirements and what sort of balance sheet has great enough margins of safey, long term capital allocation given market dislocations, etc). But that's why being net neutral on cash is in general a good thing.
Re: Apple Q4 Results
#7MacStories and Six Colors created graphs comparing the data from this quarter to past quarterly results https://www.macstories.net/news/apple-q4-2019-results-64-bil... https://sixcolors.com/post/2019/10/apple-results-64b-in-reve...
What terrible charts. I won't go through it line by line but why highlight Q1 vs Q4 instead of prior year Q4 vs current period Q4 (ie, year vs year). Highlighting periods with holiday sales against current nonholiday periods is ridiculous.
I updated my comment to include Six Colors's article, which has more year-over-year graphs
Re: Apple Q4 Results
#8What exactly is the advantage of reaching a cash neutral position? If you are a company that can reliably do that does that mean you no longer have to grow — since your investors are primarily attracted to a reliably stable ability to generate dividends?
The advantage has been explained well by the sibling comments. They are not promising such a big dividend that they can’t invest cash into increased operations and R&D.
A company that is primarily valued for its dividend is one that has promised such a big dividend that it risks cutting the dividend when it has to grow or fix problems (like GE.) Maestri is not going to let that happen, which is why they are approaching net cash zero carefully over time and majorly using buybacks, which do not set the same expectation for investors as dividends.
Re: Apple Q4 Results
#9What exactly is the advantage of reaching a cash neutral position? If you are a company that can reliably do that does that mean you no longer have to grow — since your investors are primarily attracted to a reliably stable ability to generate dividends?
The history is that apple had a crazy cash position partly because of the need to keep cash overseas to avoid tax on repatriation. What they did was borrow against that overseas cash to get US based on dollars.
Cash neutral doesn't relate to growth, if you grew you'd need to increase cash to cover working capital needs generally (ie, Apple first has to pay for parts, inventory, factories, staff for them etc before it gets revenue from sales).
Excess cash above this - it can be argued is not useful for apple to hold. Ie, investors can earn as much on cash as apple AND might want to invest it in things that theoretically could earn more - especially now with low interest rates. They can get to cash neutral a couple of ways. Because gross net income is going down, share buybacks one option - they've already been doing lots of that. Dividends is another. Pushing a bit on R&D might be another. No rush on that change.
Re: Apple Q4 Results
#10Earlier quoted context omitted.
What terrible charts. I won't go through it line by line but why highlight Q1 vs Q4 instead of prior year Q4 vs current period Q4 (ie, year vs year). Highlighting periods with holiday sales against current nonholiday periods is ridiculous.
I updated my comment to include Six Colors's article, which has more year-over-year graphs
Most of the graphs on Six Colors have 2019-Q4 missing and some of the numbers are wrong. For example compare total revenue change for 2019-Q2 with the actual numbers in the second chart above.