Apple dividend: Bad earnings band-aid or good earnings accelerant

“March 19, the first anniversary of Apple’s 2012 dividend announcement, came and went without remark from the company, let alone the 56 percent increase in that dividend some analysts were predicting,” John Paczkowski writes for AllThingsD.

“And now, as it heads towards its next earnings report, scheduled for release on April 23, questions are emerging about Apple’s intent in delaying word on its dividend,” Paczkowski writes. “Could the company’s silence about its capital allocation plan be an indicator of bad earnings news in the pipeline? Is Apple planning to use news of a dividend increase as a poultice for a share price bruised by some disappointing financials?”

Read more in the full article here.

Related article:
Apple to webcast Q213 earnings release conference call on April 23rd – April 3, 2013


  1. If you want to bump the share price you time the announcements. I wouldn’t announce a dividend bump a week before earnings. Better at earnings, or maybe a bit after, especially if you think earnings might start some momentum that the bump could build upon. Also, as the article suggests, if you need to counter negative momentum that earnings might cause.

  2. In my experience, other than special dividends, companies don’t change dividends more frequently than once per year. Waiting for the 4 qtrs to play out before announcing an increase was what I expected.

  3. Dividends are a bad call. It only stirred up those more interested in manipulation not long term investors. The increased volatility began with the first divided. The sharks sensed blood in the water with Tim Cook. Bad call.

    1. You should quit seeking reasons to diss Cook. It is easy to find fault in hindsight and to play fantasy CEO. Time will tell how well Cook performs – your opinion won’t factor into that assessment.

      Dividends are simply a tool and, as such, can be applied for good or ill. Dividends typically manifest in the evolution of a company as it transitions from a growth company and does not need to put the cash back into the company. Apple clearly has more cash and securities than it needs for R&D and supply line pre-orders and so forth. As the cash cushion continues to grow, it was inevitable that Apple would implement stock buy-backs and a dividend.

      Apple was (and is) unique as a massive company consistently maintaining substantial YoY revenue and profit growth with no long term debt and a huge balance sheet of cash and securities. To the best of my knowledge, there is no other public company like Apple in the world, and I do not recall any in the past, either. As a result, Cook and company are charting new ground. So what you think and what various pundits and analysts think are not worth very much. I’ll stick with the judgment of those who helped create the highly successful Apple that exists today.

    2. You are correct RP. Kingmel might say you are trying to diss Cook when you are instead stating facts. To think that these stock manipulators want a dividend INCREASE is laughable after what they have done.

  4. Dividends are little lagniappes to keep investors putting money into a business that:
    1) is stable / mature
    2) has slow growth prospects
    3) has no new competition

    If any of those conditions don’t apply, then the company should prioritize innovation and market leadership.

    To the market, it is a sign of bad leadership when a company builds up so much money in a highly competitive market but doesn’t use it to achieve technical and/or market leadership — and provides absolutely no guidance to assure potential investors the timeframe when new products can be expected.

    Android has more handsets, and therefore more potential for future earnings (even if Apple cleans up in app purchases today). Mac software updates have been slow or nonexistent.

    Cook’s refusal to press for doubling the Mac market share is unforgivable, especially since MS has so thoroughly screwed up its desktop & laptop OS.

    … and no, Apple users are not impressed with Apple blowing billions on a spaceship building with custom curved German glass.

    One has to wonder, has Apple become the arrogant corporation that it used to lampoon?

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