Outcome of Apple’s discussions concerning its cash balance

 

Update 10.00pm GMT After hours price reaches $604.75 as Apple announced ” …. it has sold three million of its incredible new iPad®, since its launch on Friday, March 16.”

Apple share price closed + 2.65% at $601.10 Virtually the high for the day ($601.77), and a new all time closing high and also the  first time it’s closed over $600. (After hours per WSJ still moving up)

Apple Press release Dividend from their Quarter 4 of 2012 (ie announced/confirmed along with their results in July) at $2.65 per share (Good!) Share buyback of up to $10 billion (not so good in our view – although if, as appears to be stated, it is simply aiming at a no dilution scenario re option arrangements then it has some merit). We note that 4 x $2.65 for their quarterly dividends is rather close to our forecast of $10 per share!

“Combining dividends, share repurchases, and cash used to net-share-settle vesting RSUs, we anticipate utilizing approximately $45 billion of domestic cash in the first three years of our programs,” Oppenheimer said. “We are extremely confident in our future and see tremendous opportunities ahead.”

Conference call recording from Apple. (It’s just over 20 minutes long)

On locating a transcript we will post a link.  Here’s Macworld’s edited transcript – apart from a rather costly service at $106 we think this is likely the best available!

GMT 1.30pm Here are Macrumours and AppleInsiders summaries of the Conference Call

Nasdaq open and shares circa $593 initially – likely take some time to settle up or down! WSJ quote

Wall Street Journals initial reactions (mentions pre-market trade in shares was stopped at some stage)

Bloombergs view.

Reuters

 

GMT  Just pre 1pm

Shares (pre market) seem to have steadied at just under $600.

Webcast page has gone green with rather sombre music!

GMT 1pm PDT 6am EDT 9am

Waiting as usual for a few laggards to join in!

Guess they (Openheimer) will initially virtually just read the Press Release

Begins.- Director Investor Relations – Standard chit chat!

Tim Cook first:

37 million iPhones last quarter Potential enormous

55million  iPads to date will overtake PC market

+ iCloud +Siri +40 new stores last fiscal

Plenty cash!

Innovation is most important objective.

Now Oppenheimer

$64bn outside US end 2011

Declare dividend with results announce July ie 2nd calendar quarter

Over $10bn cost in first year for dividends

From Sept 30 buy back shares equivalent to option issues so no (net dilution)

Questions now

Barclays

Any growth in Dividends envisaged?

Don’t want to repatriate more cash for tax reasons

Any new product info?

Cook don’t announce it in Conference Calls!

Morgan Stanley

Repatriating cash?

Oppenheimer – expressed disagreement legislation

Piper Jeffries

How often revisit dividend level

Cook continually review

(line down – at least here) Back

Oppenheimer continually review!

Cross research

Missed question

Oppenheimer $10bn a year on dividends

Asking Tim philosophical view on cash

Tim – looked @ US cash & requirement for innovation + war chest then had balance so dividend + buyback

Next question – do you need $30bn balance?

Cook no magic number being retained – continual review

That’s it – Share price weakened a bit to circa $593 pre market.

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