By Adam Satariano - Mar 19, 2012 6:27 AM GMT+0700
Apple Inc. (AAPL) will outline plans on a conference call tomorrow for its $97.6 billion in cash and investments, signaling that investors may get the dividend they’ve been seeking from the world’s most valuable company.
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 today. The company didn’t elaborate on its plans, and said it won’t discuss topics besides cash.
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)
Apple’s cash pile has swelled amid surging demand for its products, such as the iPhone and iPad. Shareholders have urged Apple to return some of the balance to investors in the form a dividend, and have been awaiting an announcement after Cook said this year the company has “more than we need to run a company” and that the board is considering its options.
“This is something that large shareholders have been asking for,” said Shaw Wu, an analyst at Sterne Agee & Leach Inc. “When you look at the cash generation capability of Apple, it’s just tremendous.”
Apple may introduce a dividend of $2 a share, according to data compiled by Bloomberg. That estimate is based in part on the dividends paid by other large technology makers, including Microsoft Corp. and International Business Machines Corp. 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.
Dividend Predictions
A dividend would be an added boon to investors who have already seen the company’s stock rise 45 percent this year to $585.57 as of March 16. Apple co-founder Steve Jobs, who died in October, long resisted calls to return some of the money to investors.
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. Besides Wu, 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. The company last week debuted a third-generation iPad, which comes with a high-definition screen and faster processor.
Apple this year surpassed Exxon Mobil Corp. (XOM) to be the world’s most valuable company. The iPhone maker’s market value is $545.97 billion, compared to $407.4 billion for Exxon Mobil.
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
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