Apple Set To Decide Fate Of $100B Cash Reserve
CUPERTINO (CBS SF/CNET) — Apple will hold a conference call Monday morning to discuss its nearly $100 billion cash balance, the company announced Sunday afternoon, a sign the company may be getting ready to give some money back to its stockholders.
The company, which hasn’t paid a regular dividend since 1995, has $97.6 billion of cash on hand and carries no debt on its books, according to a January filing with the U.S. Securities and Exchange Commission.
In a note to investors last month posted by Fortune, UBS said that Apple’s management has been “soliciting opinions of large shareholders” about paying a dividend, something that Apple is frequently asked about.
Apple’s board of directors has been discussing how to use the cash more and “in greater detail” than before, Apple CEO Tim Cook said last month during a keynote interview at the Goldman Sachs’ annual Technology and Internet Conference.
“It’s clear to everyone that we have more cash than we need to run the business on a daily basis,” Cook said during the keynote. “I would ask for a bit of patience so we can do this in a deliberate way so we can make a decision that respects the shareholders.”
Of course, the announcement of a dividend is just one of the many moves the company could make with its mountain of cash. The tech giant might be ready to announce a stock-buyback plan or a large acquisition, or perhaps it has earmarked the money for capital expenditures on large construction projects, such as its new “spaceship” campus in Cupertino, Calif., or its data centers in North Carolina and Oregon.
Fueled by record sales of the iPhone, Apple posted its biggest quarter ever last quarter—earnings of $46.33 billion and profits of $13.06 billion.
Apple’s stock price reached a record $600 on Thursday in anticipation of song sales of the new iPad before retreating to a $585 closing price, giving the company a market valuation of more than $545 billion. The milestone highlights the meteoric stock price gains over the past three years, coming only a month after hitting $500 and three months after hitting $400.
The meeting, which is scheduled to begin at 6 a.m. PT, will be hosted by Cook and CFO Peter Oppenheimer, and will only address the company’s cash reserves. No updates on the current quarter will be discussed.