“Apple’s cash and cash equivalent balance has continued to go up,” Puneet Sikka reports for Market Realist. “Apple’s cash and cash equivalent balance has increased from $137 billion in the fiscal first quarter of 2013 to $164 billion in the latest fiscal third quarter of 2014.”
“Interestingly, Apple has already taken action on $74 billion of the $130 billion capital return program, including $51 billion in share repurchases,” Sikka reports. “This program will be completed in another six quarters.”
“During the last quarter, Apple repurchased 59 million of Apple shares in the open market for $5 billion. The company also paid $2.9 billion in dividends,” Sikka reports. “Apple made a comparatively big acquisition in the last quarter—Beats Electronics and Beats Music for $3 billion. In fact, this was the largest acquisition in Apple’s history, easily beating the $400 million acquisition of NeXT Software in 1997. Besides Beats, Apple made 29 acquisitions since the beginning of the 2013 fiscal year, including five acquisitions in the last quarter. However, these were smaller acquisitions, which aren’t hurting Apple’s cash balance.”
Read more in the full article here.
The $400M spent on NeXT was the best investment ever.
It sure was!!
I wonder however, if all those that gave you 5 stars realize what a huge role Forstall had in that success. Yet, he was unceremoniously given the boot for NOT apologizing for maps. Which by the way, is a wonderful App that will grow and grow…. despite what the press would have you believe.
From what I understand, there were more reasons for Forstall’s departure than just Maps. But I think it’s safe to say that all present and former members of the executive team have done a spectacular job.
Lastly, lets not forget Gil Amelio who was responsible for the NeXT acquisition.
Gil Amelio was an idiot. Not that I know first hand, but it is the impression I got listening to the Walt Mossberg/Karan Swisher
interview of Steve and Bill. There is a bit when Steve talks about Amelio, Unwieldily Ships, Rocks and Steering. Crack me up every time I listen to that story.
The exact quote by Amelio was “Apple is like a ship with a hole in the bottom, leaking water, and my job is to get the ship pointed in the right direction.”
Regardless of what Jobs thought of him, the fact is, Amelio did his job. Clearly, he lacked much of what Steve Jobs (and his team) brought to the table, but Apple was sinking very fast, and Amelio was able to radically reduce costs, cancel many projects stuck in development hell (Copland) and identify that an acquisition or merger was needed to survive. Amelio was the one who passed on BeOS (due to a $275 million versus $200 price gap in negotiations). He also passed on being acquired by Sun, and ultimately made the “reverse-acquisition” with NeXT.
Without Amelio, there would have never have been a second coming of Jobs, because Apple would’ve been dead by that time.
Think of it this way… the ship was sinking very fast and was practically underwater. Amelio got it floating on the surface again, called in support, and Jobs turned the ship into a rocket and took off.
Adjusted for inflation, it is $580M
Sweet! I hope the Beats deal works out well for Apple in regards to iTunes Radio music streaming. I still believe Apple’s manufacturing arm can turn Beats headphones into something that users can control with a switch to disable the heavy bass that many people seem to dislike. Maybe they can also build them to last if quality control is a problem. There’s almost nothing Apple can’t afford to do with that mountain of cash.
Just one example of what Google is doing with its dwindling cash hoard: http://arstechnica.com/business/2014/08/one-of-googles-mystery-barges-has-been-sold-and-is-shipping-out/
Perhaps the biggest challenge facing any CEO is capital allocation. The decisions they make based on that, over time (two very important words) will determine the fate of the company they run and be the measure of their long-term performance.
I view a company’s ability to generate cash as being a key metric of its performance. It’s often overlooked by market watchers and pundits. Without cash, a company’s gas tank will quickly run dry. And generating cash is something that Apple does as well as any company in the world.
If you’re an investor who wants to understand why capital allocation and cash generation are so critical to a company, I highly recommend reading “The Outsiders” by William Thorndike. It’s an easy read, and a fascinating book.
The jury is still out on Tim Cook, as he is relatively new to being CEO. But my hunch is that a decade from now, we’ll take a very positive view of what he has done with Apple’s cash (e.g., capital allocation). So often, we see pundits take pot shots at someone like Cook, without taking a longer term view of the company’s performance. It’s a bit like a blind man trying to describe a redwood tree. I believe however that Apple has been quietly laying the ground for some great things to come.
Innovation does not happen on command, something Wall Street and pundits simply don’t understand. It’s like yelling at a tree to make it grow faster. But trees don’t care, and they don’t grow that way. I sense that Apple is building a foundation of technologies, deals, partnerships, technology licenses and standards, as well as interlocked services that will greatly impact the company’s growth and success over time. It will take years to see this all play out. But I am confident that how Mr. Cook allocate’s Apple’s cash will eventually be seen as highly successful.
“Mountin’ of Cash”?
What’s June Carter got to do with this…?
Cue the Sad Trombones:
” waa, WAAAAAA”