Saturday, January 20, 2018
Business

Apple may be on verge of spending, sharing its massive cash pile

SAN FRANCISCO — Apple has Wall Street's full attention after hinting at plans for the company's $100 billion cash pile that may lead to stockholders receiving a dividend.

Apple, based in Cupertino, Calif., is "actively discussing" uses for its cash, including a dividend, buyback, acquisitions and supply-chain investments, chief financial officer Peter Oppenheimer told analysts and investors Tuesday in an earnings conference call.

The comments were a welcome sign for investors who have called for a dividend as Apple has added to its balance sheet. Apple's $97.6 billion in cash and investments is larger than the market value of all but 26 companies in the Standard & Poor's 500 index. The total could reach $150 billion by year's end if the company doesn't give money back to shareholders, said David Rolfe, chief investment officer of Wedgewood Partners.

"They have turned into the First National Bank of Cupertino," said Rolfe, whose firm manages $1.3 billion in assets, including Apple shares. "Common sense dictates that they don't need a cash hoard of $150 billion."

Apple reported fiscal first-quarter profit this week that more than doubled to a record $13.1 billion, boosted by holiday purchases of the iPhone and iPad tablet. Sales jumped 73 percent to $46.3 billion. Gross margin, the percentage of sales remaining after deducting the cost of production, rose to 44.7 percent from 38.5 percent a year earlier, the company said.

Through Thursday, Apple stock is up about 30 percent in the past 12 months.

A policy change would attract a new class of investors who only buy shares of companies that offer dividends, said Brian White, an analyst at Ticonderoga Securities.

"It's going to be a gusher when they tap into that thing," White said. "It's like tapping into an oil field out in Texas."

Canaccord Genuity, Jefferies and Morgan Stanley analysts also expect Apple to announce a dividend or buyback.

Even so, not all analysts say a dividend is a good idea. Apple's refusal to return the money to shareholders — even a one-time payment that wouldn't recur each quarter — speaks to the confidence of a company that intends to chase giant growth opportunities, said Trip Chowdhry, an analyst at Global Equities Research of Redwood City, Calif.

"If Apple declares a dividend, it would be an indication to me that it's time to get out of the stock," Chowdhry said.

Oppenheimer, Apple's finance chief, didn't say if, or when, Apple would disclose a decision about use for its cash.

Apple CEO Tim Cook said last year that he wasn't "religious" about holding on to Apple's cash. That signaled a change from co-founder Steve Jobs, who had been more resistant to shareholder calls for a dividend or buyback.

Ticonderoga's White said it would be a surprise if Apple made a large acquisition, something it typically doesn't do.

On the call, Oppenheimer described Apple's approach to making acquisitions.

"We have done acquisitions where they tended to be smaller or medium-sized companies that have just great engineering and other talent, a great start on a product or a technology that we'd like to bring into Apple," he said. "We tend to do several a year. We're very, very disciplined in how we think about this and how we do it, and I think our track record here has been very strong."

Comments
Tampa Bay jobs chief Ed Peachey making top dollar

Tampa Bay jobs chief Ed Peachey making top dollar

For years, Edward Peachey has bragged about the number of jobless people he has helped find work.As president and CEO of CareerSource Pinellas and CareerSource Tampa Bay, he’s in charge of the two main government agencies that provide training to the...
Published: 01/20/18
Sunday Conversation: Lightning VP Keith Harris strikes a chord for the Boys & Girls Clubs

Sunday Conversation: Lightning VP Keith Harris strikes a chord for the Boys & Girls Clubs

Keith Harris fondly looks back on some memorable days from his Tampa upbringing when he worked as a lifeguard at a pool next to a Boys & Girls Club. ¶Whenever it rained, he watched as the kids retreated to the safe haven of the club. They entered int...
Updated: 10 hours ago
Inspector General launches investigation into Tampa Bay’s local career centers

Inspector General launches investigation into Tampa Bay’s local career centers

The state has opened an investigation into CareerSource Pinellas and CareerSource Tampa Bay, days after the Tampa Bay Times asked about whether the two regional job centers were inflating the number of people they had helped get hired. The agencies, ...
Published: 01/19/18
Tech firm TranferWise moves to Ybor City, illustrating a new chapter in Tampa’s business history

Tech firm TranferWise moves to Ybor City, illustrating a new chapter in Tampa’s business history

TAMPA — You could sketch an economic history of the city of Tampa — and maybe get a glimpse of its future — just by looking at the old J. Seidenberg & Co./Havana-American Cigar Factory.It opened in 1894, making it Ybor City’s second-oldest brick ciga...
Published: 01/19/18

Want to buy into an exchanged-traded bitcoin fund? You might have a long wait

NEW YORK — It may be a while, if ever, before investors can buy an exchange-traded fund made up of bitcoin and other digital currencies. Federal regulators have a long list of questions they want answered before they’ll approve a digital currency fun...
Published: 01/19/18
Child psychologist weighs in on mom who charges 5-year-old ‘rent’

Child psychologist weighs in on mom who charges 5-year-old ‘rent’

A Georgia mother has gone viral for charging her 5-year-old "rent." Yup — the kid pays up for food, water, cable and electric, too.Essense Evans described in a Facebook post how she handles her daughter’s allowance. The post, written on Saturday, was...
Published: 01/19/18

Addicted to your smartphone? Now there’s an app for that

Did you text? Sorry, I can’t see messages right now. Arianna Huffington locked my phone.The media tycoon turned wellness entrepreneur wants to keep you out of your phone, too, with a new app called Thrive. Its goal is to make it cool for a generation...
Published: 01/19/18
Proposed monument near St. Pete pier would honor Tony Jannus history-making flight

Proposed monument near St. Pete pier would honor Tony Jannus history-making flight

ST. PETERSBURG — Tony Jannus’s history-making flight in an early seaplane — simultaneously as ungainly and graceful as a pelican on the wing — is what Mayor Rick Kriseman calls an "under-told and under-appreciated" story, but a team of local history ...
Published: 01/19/18
Learn how bus rapid transit (and rail) could work in Tampa Bay

Learn how bus rapid transit (and rail) could work in Tampa Bay

ST. PETERSBURG — The newest hope for transportation in the Tampa Bay area is a bus rapid transit system projected to cover the 41-miles separating St. Petersburg from Wesley Chapel and attract 4,500 new riders at a fraction of the cost of light rail....
Published: 01/19/18
Five things Tampa Bay needs to know about bus rapid transit

Five things Tampa Bay needs to know about bus rapid transit

ST. PETERSBURG — Transportation planners on Friday unveiled a new transit vision for Tampa Bay leaders on Friday morning: Bus rapid transit.Also known as BRT, it has arisen as the leading option in an ongoing study to find the best regional transit p...
Published: 01/19/18