“It’s been more than two months since Apple Inc. disclosed its management and executive teams were in active discussions about returning more cash to shareholders,” Steven Russolillo reports for The Wall Street Journal. “So, where’s the dough?”
“Toni Sacconaghi, a technology analyst at Sanford C. Bernstein & Co. in New York, predicts a bigger cash payout from Apple is coming, but not until ‘weeks’ after the iPhone and iPad maker’s April 23 earnings announcement,” Russolillo reports. “Such a proclamation may come as a bit of a disappointment. Some investors anticipated Apple would’ve disclosed its cash plans last month, largely because Apple unveiled its existing dividend and buyback plans in mid-March one year ago.”
Russolillo reports, “Sacconaghi said he expects Apple to take on debt to pay for a larger cash distribution to shareholders, as opposed to repatriating offshore earnings that would incur taxes. He has estimated Apple holds more than 2/3 of its cash offshore, a scenario that makes it harder for the company to simply snap its fingers and return more cash to shareholders. ‘Our conversations with investors who have met in person with Apple executives this quarter suggest that Apple has become increasingly open to the concept of debt, which represents a major change in mindset,’ Sacconaghi said. ‘We have long advocated that taking on debt makes eminent sense for Apple, given today’s prevailing rate environment and Apple’s strong credit rating.'”
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