Apple Seen Paying Some of $97.6 Billion in Cash as Dividend
Apple Inc. (AAPL), which plans to discuss its $97.6 billion in cash and investments in a conference call today, is likely to announce a dividend, according to analysts’ predictions and data compiled by Bloomberg.
Chief Executive Officer Tim Cook and Chief Financial Officer Peter Oppenheimer will host the call, scheduled for 9 a.m. New York time, Cupertino, California-based Apple said in a statement yesterday. The company didn’t elaborate on its plans, and said it won’t discuss topics besides cash.
“They should pay a dividend,” said Shaw Wu, an analyst at Sterne Agee & Leach Inc. “This is something that large shareholders have been asking for.”
Apple’s cash pile has swelled amid surging demand for its products, such as the iPhone and iPad. Investors have urged Apple to return some of the balance in the form a dividend. Cook fueled speculation an announcement might be coming when he said this year that the company has “more than we need to run a company” and that the board is considering its options.
Apple directors held a meeting in the past few weeks to discuss the plans, said Wu, who predicted that Apple will announce an annual dividend of 2 percent to 3 percent of its share price. That indicates a dividend of $11.71 to $17.57, based on Apple’s closing share price of $585.57 on March 16. In German trading today, the stock gained 3.1 percent to the equivalent of $601.39 at 10:03 a.m. in Frankfurt.
Steve Dowling, a spokesman for Apple, declined to elaborate on the statement.
Dividend Estimates
Apple may issue a quarterly dividend of $2 a share, according to data compiled by Bloomberg. The estimate is based in part on the dividends paid by other large technology makers, including Microsoft Corp. and International Business Machines Corp. Brian Marshall, an analyst at ISI Group, projects an annual dividend of $14.65 a share.
While a share buyback is also a possibility, a dividend is more probable, Wu said.
Apple and Google Inc. (GOOG), owner of the most-popular search engine, are the only technology companies with market values higher than $100 billion that don’t pay a dividend.
Apple generated $16 billion in cash in the first quarter of fiscal 2012, which ended in December. Wu predicts that Apple will generate about $75 billion in cash this year. Analysts at Morgan Stanley, JPMorgan Chase & Co. (JPM) and Mizuho Securities USA Inc. also have predicted that Apple will institute a dividend.
The growing amount of money on Apple’s balance sheet has followed the introduction of the iPhone, the best-selling smartphone, and the iPad, the leading tablet computer.
Jobs’s Resistance
The company last week began selling a third-generation iPad, which comes with a high-definition screen and faster processor.
A dividend would be an added boon to investors who have already seen the company’s stock rise 45 percent this year. Apple co-founder Steve Jobs, who died in October, long resisted calls to return some of the money to investors.
Apple last paid a dividend in 1995, before Jobs returned as CEO and led the introduction of top-selling products including the iPod, iPhone and iPad. The final dividend, of 12 cents a share, was suspended amid leadership upheaval and dwindling computer-market share. According to a company filing, Apple’s cash, equivalents and short-term investments dropped by about half, to $491 million, in the year through Sept. 29, 1995.
Highlighting its turnaround since that period, Apple has surpassed Exxon Mobil Corp. (XOM) as the world’s most valuable company. The iPhone maker’s market value is $545.97 billion, compared with $407.4 billion for Exxon Mobil.
(Apple will webcast the conference call, scheduled for March 19 at 9 a.m. New York time, at www.apple.com/quicktime/qtv/call31912.)
To contact the reporter on this story: Adam Satariano in San Francisco at asatariano1@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net
IPad
David Paul Morris/Bloomberg
iPad at an Apple store in San Francisco on March 16, 2012.
iPad at an Apple store in San Francisco on March 16, 2012. Photographer: David Paul Morris/Bloomberg
Marc 19 (Bloomberg) -- Stanley Crouch, chief investment officer of Aegis Capital Corp., discusses the outlook for Apple Inc. Apple, which plans to discuss its $97.6 billion in cash and investments in a conference call today, is likely to announce a dividend, according to analysts’ predictions and data compiled by Bloomberg. Crouch, speaking with Erik Schatzker, Stephanie Ruhle and Sara Eisen on Bloomberg Television's "InsideTrack," also talks about the outlook for global markets and investment strategy. (Source: Bloomberg)
March 19 (Bloomberg) -- Ian Harnett, managing director at Absolute Strategy Research Ltd., talks about Apple Inc.'s cash strategy and the outlook for equities. He speaks with Erik Schatzker on Bloomberg Television's "InsideTrack." (Source: Bloomberg)
March 16 (Bloomberg) -- Apple Inc. began selling its new iPad today, drawing the customary lines of cheering, die-hard fans to Apple stores around the world. Bloomberg's Jon Erlichman reports on Bloomberg Television's "Bloomberg West." (Source: Bloomberg)
March 19 (Bloomberg) -- Bloomberg's Cris Valerio reports that Apple Inc., which plans to discuss its $97.6 billion in cash and investments in a conference call today, is likely to announce a dividend. She speaks on Bloomberg Television's "Inside Track." (Source: Bloomberg)
Apple Inc. Chief Executive Officer Tim Cook
David Paul Morris/Bloomberg
Tim Cook, chief executive of Apple Inc.
Tim Cook, chief executive of Apple Inc. Photographer: David Paul Morris/Bloomberg
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