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Apple’s billion-dollar dilemma: What in blue blazes to spend its hard earned cash on?
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Its the question on everybody’s lips after Cupertino announced it was is now sitting on a cash pile of $100 bn.
Cupertino’s net profits for first fiscal quarter of 2012 were also $13.1bn, announced today.
This net income figure marks an astonishing doubling of the $6bn figure recorded this time last year and has sent shares soaring to over $450.
By comparison Microsoft, the former numero uno of the tech industry, shares are currently hovering around the $29 mark.
Apple cash and marketable securities are now hitting an eye watering $97.6b, Apple’s top number cruncher, CFO Peter Oppenheimer (and probably one of the happiest accountants in the planet at the moment) revealed today at Apple’s Q1 2012 earnings call.
So are Apple about to pounce on a major new acquistion? Oppenheimer was giving nothing away to investors as to what it has planned:
“We have done acquisitions that have tended to be smaller to medium size companies,” Apple’s CFO said. “That’s really the acquisitions that we have done.”
Apple is already the most valuable corporate entity in the world by market capitalisation, and these figures mean if all the company shares were sold, it would bag $100bn on the spot.
At one stage mid last year, Apple had more cash than the US Federal Reserve of $73.768 billion and could bail many a debt riddled Euro zone nation out of a crisis.
‘Burn a hole’
“We are actively discussing uses of our cash balance and don’t have anything specific to announce today,” Oppenheimer added.
But he also warned Apple were not getting giddy with its big bucks, saying: “In the meantime, we continue to be very disciplined with the cash and are not letting it burn a hole in our pocket.”
But here’s what Apple could buy with its bazillions: BlackBerry (ailing, but still has BBM), Kodak (bankrupt, but patents galore), bail out the US government of its debt (provided a yahoo Republican doesn’t get the Presidency).
On last check, Apple’s shares were up to $451.38 today and some analysts believe could hit a dizzy high of $500.
“We’re thrilled with our outstanding results and record-breaking sales of iPhones, iPads and Macs,” said Cook.
“Apple’s momentum is incredibly strong, and we have some amazing new products in the pipeline.”
During the second fiscal quarter of 2012 Apple said it expects $32.5 billion revenue and diluted earnings per share of about $8.50.
It must also be noted Apple has not paid a dividend to shareholders since 2002, with Steve Jobs rejecting the idea several years ago, so maybe investors are in for a major boon this year, which could send demand for shares even higher.
And, analysts already tipped Apple shareholders will receive a “significant” dividend this year. Watch this (billion dollar) space.
