Apple Signals More Cash for Shareholders
Apple is in the midst of a program to return $45 billion in excess cash to shareholders but signaled Thursday that it is considering returning even more.
The company said in a statement to investors that by next week it will have delivered to shareholders $10 billion of the $45 billion in excess cash Apple pledged last March to return in the form of a dividend and stock repurchase program.
"We find ourselves in the fortunate position of continuing to generate large amounts of cash, including $23 billion in cash flow from operations in the last quarter alone," Apple said, adding that its board and management team were "in active discussions about returning additional cash to shareholders."
When initiated, Apple's current repayment program was expected to take three years, beginning with a quarterly dividend of $2.65 per share that kicked off last July. The $10 billion share repurchase component of the plan started last September.
Apple also clarified an issue regarding the issuance of preferred stock in light of a lawsuit filed this week by hedge fund Greenlight Capital. Greenlight's activist shareholder suit is an effort to require the iPhone maker to dole out more of its cash reserves in the form of "preferred stock with a perpetual 4 percent dividend," according to Reuters.
Apple Earnings Worry Investors; Stock Falls 10 Percent
Apple reported a revenue of $54.5 billion for the quarter ended December 29, 2012, compared to $46.33 billion in the year-ago quarter. The tech giant just missed analyst expectations of $54.73 billion.
Apple also earned a net profit of $13.1 billion ($13.81 a share) compared to $13.1 billion ($13.87 a share) a year ago. Profit clearly remained pretty flat, but it exceeded analysts' expectations of $13.44 a share.
The iDevice maker also noted that it had record iPhone sales for the quarter at 47.8 million (compared to 37 million in the year-ago quarter). It also had an uptick in iPad sales, from 15.4 million in the year ago quarter to 22.9 million in the most recent quarter.
“We’re thrilled with record revenue of over $54 billion and sales of over 75 million iOS devices in a single quarter,” said Tim Cook, Apple’s CEO. “We’re very confident in our product pipeline as we continue to focus on innovation and making the best products in the world.”
Apple Stock Price Breaks Records as Facebook Falters
Apple execs admitted during a recent earnings call that sales of the current iPhone were dropping off amidst rumors of the iPhone 5 coming in September. But those rumors don't seem to have affected Cupertino's stock price, which helped the company achieve a valuation that exceeded $600 million today.
Facebook, however, did not fare as well, with its stock price falling to $19.05 for a $40.81 billion valuation.
Apple's stock closed out the day at $648.11 for a valuation of $607.54 billion. Previously it's highest price was $644 on April 10, The Economic Times said.
Back in January, amidst speculation that Facebook was prepping to announce its IPO, Apple was valued at $422.37 billion. Speaking of Facebook, which officially went public in May, Reuters reported that shares of the social network's stock dropped 4.3 percent today "to set a new low."
Apple is reportedly gearing up for the Sept. 12 launch of the next-gen iPhone, and might also take the wraps off a smaller version of its iPad, dubbed the iPad mini. Earlier today, Jefferies analyst Peter Misek said the iPhone 5 debut could be the "biggest handset launch in history."
Apple Uses Part of Cash Hoard for Dividend, Share Repurchase
Apple on Monday announced plans to use part of its "war chest" for a dividend and stock repurchase program.
The program, which will be executed over three years, will utilize about $45 billion of domestic cash.
The company will start a quarterly dividend of $2.65 per share at some point in the fiscal fourth quarter, which begins July 1.
During an early morning conference call, Apple CEO Tim Cook said the move will provide current income to existing shareholders and, hopefully, broaden Apple's investor base by attracting those who don't currently own Apple stock.
A $10 billion share repurchase, meanwhile, will start in fiscal 2013, which starts on Sept. 30. The primary objective, Apple said, is neutralizing the impact of dilution from future employee equity grants and employee stock purchase programs.
Can Apple Hit $600? Try $700, Says Wall Street
On the heels of unveiling its shiny new iPad, Apple stock is fast approaching $600 per share. That milestone would be remarkable enough for a company that was trading at under $7 prior to a stock split less than ten years ago, but several Wall Street analysts are now tipping the company to crack the $700 barrier.
Apple, traded on the NASDAQ, closed Wednesday at $589.58, a 3.8 percent gain for the day for a company that's up 46 percent this year. In the past few weeks, at least four analysts have notified clients they believe Apple will gain at least another 19 percent and hit $700 or higher, according to Bloomberg.
Those analysts include Katy Huberty of Morgan Stanley and Canaccord Genuity's Michael Walkley, who told the news agency that he's raised his price target for the company to $710. Bloomberg's most recent survey of a panel of 43 analysts yielded an average price target of $605, but Walkley said many of his peers may not have factored in the likely success of the new iPad, which industry watchers believe will further cement Apple's leadership in the tablet market.