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Apple Conference Call

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Re: Apple Conference Call

#31

Post by protomyth »

objclxt wrote: post #5
copious wrote: post #3

Earlier quoted context omitted.

I think they'd be more likely to buy back stock than to start granting dividends.

My two worthless cents: an acquisition. Who they'll acquire is anyone's guess...a carrier (probably not), a content provider (maybe), or something more technical (my insane guess: ARM). Not that I know more than anyone else, but I don't feel Apple really paying a dividend out. They've never really seemed too beholden to shareholders in the past (well, the Steve Jobs past anyway), and I think they'd rather invest the…

Sprint is in their range (8.7 market-cap expect a premium on top of that), but they really gotta be committed for that. ARM's business model makes anything but a investment a waste. AMD or NVIDIA would be more interesting.

I just don't know why a dividend would be more than a press release after markets closed.

Re: Apple Conference Call

#32

Post by protomyth »

uvTwitch wrote: post #24
rpledge wrote: post #4

Earlier quoted context omitted.

That's my guess. Or else they'll announce that they're starting a space program! My understanding is that ably $66 billion is offshore. I really expected them to sit on the cash until the US government gave them some sort of tax amnesty

A space program is about the only worthwhile thing apple could do with that money. The world doesn't need any more novel distractions, or rich investors.

Retirement funds might disagree.

Re: Apple Conference Call

#33

Post by cynicalkane »

gwright wrote: post #19
trimbo wrote: post #13

Dividend, book it. Major shareholders are probably getting antsy about it. Just an example, if they paid out $50bn in a one time divvy, Fidelity would get around $2.6 billion.

And the value of Fidelity's Apple stock would go down by $2.6 billion. The $100 billion in cash is currently factored into the share price. Dispurse the cash and the market will discount the share price to match. Personally I'm hoping for something more interesting than a special dividend. It does seem strange to have the announcement before the trading day begins though. I would think any big announcement would come…

Factoring cash into share prices is fine if you're in Econ 101 or you're Warren Buffet, but in practice stocks usually go up when they announce an increase in expectations in dividend payouts. At some point the market does not trust firms to manage their extra cash to line shareholders' pockets rather than their own, and beyond that point the market wants to see dividends paid out.

Re: Apple Conference Call

#34

Post by rdl »

tlammens wrote: post #17
malay wrote: post #8

Earlier quoted context omitted.

Apple and Tim Cook have made it clear that they have more cash than what is required to run the business. Apple is spending billions on data infrastructure, manufacturing, pre-purchasing components and expanding retail operations; despite all these investments, they still have more cash than what they need. They will likely generate another $50B in cash this calendar year. Even if they want to maintain the $100B war…

You are assuming that the profits they reported this quarter will be the same next quarters, why?

Revenue in the current quarter should be less than last quarter, but YOY growth is still insane. iPad 3 launch seems to have gone well, which will help the next quarter.

It's reasonable to at least project the same growth for future quarters, year on year, as Apple got in their Q1 (which includes christmas, iPhone 4S launch, death of Steve Jobs, ...).

This year should have a rev of most of the Mac line (hopefully Pro if they don't kill it, too, although it doesn't move the needle on revenue), iPad 3 selling an absurd number of units, and an iPhone 5. The big innovation I've seen with Apple in the past couple product cycles is keeping their older iOS products on sale at a reduced price point, so now you get to choose iPad 2 or iPhone 3GS/4 on price vs. any competitor (and still better), or iPad 3/iPhone 4S as absurdly better at about price parity. Makes more sense than trying to create low end and high end products simultaneously.

Re: Apple Conference Call

#35

Post by wilfra »

As this is being announced prior to the market open on a Monday you can be sure this is good news (at least to investors and Wall Street) and the stock will go up. Bad news is released after the markets close on a Friday.

Re: Apple Conference Call

#36

Post by rdl »

blantonl wrote: post #6
copious wrote: post #3

Earlier quoted context omitted.

I think they'd be more likely to buy back stock than to start granting dividends.

let's hope not, because stock buy backs can be interpreted as a signal that management thinks tremendous earnings growth is behind the company.

It's taken as a sign that the company doesn't have anything more productive to do with the cash than buy back its own stock. This could be a positive or a negative.

If Apple had $5b in cash and decided to buy back stock, that would be a bit bearish -- they certainly can continue to make incremental cash investments (in supplier agreements, new products, etc.). $100b (which is actually probably $110-120b now, a month later) is way beyond that. Getting $50b returned to shareholders wouldn't be a sign of lack of investment options for Apple.

Re: Apple Conference Call

#39

Post by ojbyrne »

rpledge wrote: post #4
cosjef wrote: post #2

Apple about to announce dividend program?

That's my guess. Or else they'll announce that they're starting a space program! My understanding is that ably $66 billion is offshore. I really expected them to sit on the cash until the US government gave them some sort of tax amnesty

Perhaps that's what they're going to announce. Some kind of understanding with the feds that lets them bring back money to the US.

Re: Apple Conference Call

#40

Post by dkrich »

I think a dividend is imminent because at the rate of inflation that is likely to occur over the next several years, holding that much cash is a huge mistake. If there isn't a use for it in the long-term, and they can reasonably expect to print more, I agree that they should start dispersing it to shareholders.

Typically I would think the beginning of a dividend program to be a signal that the company has hit an innovation wall and doesn't know what to do with its cash. I think this doesn't really apply to Apple because cash is going to continue to flow freely into it a ridiculous rate for the foreseeable future. Hardware is extremely profitable, and they are still better positioned than anybody else to ride the shift to mobile. I still think Apple is a strong buy.

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