Apple Inc. (NASDAQ:AAPL) can certainly be in the mood to celebrate Tuesday, as the company reported quarterly revenue and earnings numbers that both rather easily beat analysts’ expectations. OK, so maybe the expectations weren’t exactly the really lofty ones that analysts have been known to make in the past regarding Apple, but in the wake of all the negativity surrounding the company and the 40-percent stock plunge off a high-dive since September, beating any expectations would be a pleasant surprise.
And it seems that Apple Inc. (NASDAQ:AAPL) may be so giddy with excitement that it made a couple of significant announcements to address the company’s jaw-dropping $145 billion cash pile (which is about 40 percent of the company’s market cap as of the close of trading Tuesday). And either way, investors in the stock are likely be flying inot the market Wednesday to make sure to buy up what they can.
Apple Inc. (NASDAQ:AAPL) announced on its earnings conference call – which my colleague, Jake Mann, followed as it happened – that it would be increasing its dividend from $2.65 per share to $3.05 per share, and increase of about 15 percent and an increased cash outlay of about $150 million per quarter ($600 million for a year) and upping the total cash outlay over the next year to $3.4 billion for dividends.
That is one way that some analysts thought Apple Inc. (NASDAQ:AAPL) should spend its cash. But some thought Apple would go one way with dividends or another way with a stock buyback. But how many in your pool picked “both”? Winner, winner, chicken dinner! The second item of news came with the Apple announcing it would accelerate its stock buyback program; while specific numbers weren’t mentioned, $60 billion is being mentioned in the press, which would be a record for any company and is a six-fold increase of the current $10 billion buyback the company was executing currently. Cook spoke about a willingness to take on a little bit of debt in order to secure this more robust buyback.
What are your thoughts about these two itesm regarding Apple Inc. (NASDAQ:AAPL) stock and its cash pile? Are you already greared up to get in on that cash, or will you be calling your broker Wednesday morning? Give us your thoughts in the comments section below.
DISCLOSURE: I own no positions in any stock mentioned.