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Apple Returning $55 Billion to Investors as Forecast Trails

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發表於 2013-4-24 09:11:25 | 顯示全部樓層 |閱讀模式
By Adam Satariano & Peter Burrows -
Apr 24, 2013 6:22 AM GMT+0800, Bloomberg

Apple Inc (AAPL). forecast sales that missed analysts’ predictions and said it will return an additional $55 billion in cash to shareholders to compensate for a stock that’s been hammered by signs of slowing growth.

The company boosted its quarterly dividend and alloted more cash to buybacks, announcing plans to borrow funds for what it called the largest share-repurchase program in history. Apple will have returned $100 billion, including past buybacks and dividends, through 2015, the Cupertino, California-based company said today in a statement.

Chief Executive Officer Tim Cook said new products will come later this year and throughout 2014, and he’s using more of the company’s $145 billion in cash and investments to reverse the slide that erased almost $280 billion in market capitalization since September. Concerns that Apple’s growth pace is slowing were reinforced by a forecast for narrowing gross margins and sales this quarter that may miss analysts’ predictions by as much as $4.9 billion.

“It’s a massive buyback,” said Alex Gauna, an analyst at JMP Securities in San Francisco. “It makes it very tempting to take a look at, but the weak outlook and falling gross margins are going to stoke the flames of concern.”

Apple had its first profit decline in a decade last quarter amid accelerating competition from Samsung Electronics Co. Fiscal second-quarter net income fell 18 percent to $9.55 billion, or $10.09 a share, Apple said today in a statement.

Sales Forecast

Cook said on a conference call that while growth is slowing, it’s not the only metric Apple uses to judge success.

“We do want to grow faster,” Cook said. “But we don’t view it as the only measure of our health.”

Sales in the current period will be $33.5 billion to $35.5 billion, compared with an average prediction of $38.4 billion, according to data compiled by Bloomberg.

Gross margin, a yardstick of profitability, will be 36 percent to 37 percent this quarter, compared with 38.7 percent predicted by analysts, according to data compiled by Bloomberg. Margins narrowed to 37.5 percent last quarter from 47.4 percent a year earlier.

Margins are under pressure amid higher-than-expected sales of iPads, including the iPad mini, which are less profitable than other products, Apple Chief Financial Officer Peter Oppenheimer said on a conference call with analysts.

Also dragging on growth, some customers are opting for devices from Samsung and other device makers using Google Inc.’s Android operating system software.

Investors ‘Worried’

The disappointing third-quarter forecast steps up pressure on Apple to make the most of new products due later this year.

“Slowing growth, competition and margin compression -- people are worried about all of them,” said Shaw Wu, an analyst at Sterne Agee & Leach Inc. in San Francisco. “They’ve made the fears look justified.”

The company is working on television products and a watch that’s connected to other Apple devices, people with knowledge of the matter said. Cook said on the call that Apple is exploring new product categories, declining to elaborate.

Apple raised its quarterly dividend 15 percent to $3.05 a share, from $2.65, and boosted its share-repurchase program to $60 billion from $10 billion. The plans help extend the biggest surge in stock buybacks since the 1980s. Buyback announcements reached $208 billion in the first three months of the year, the busiest first quarter since at least 1985, according to Birinyi Associates Inc., the Westport, Connecticut-based research firm founded by Laszlo Birinyi.

‘Compelling Proposition’

Cook faced pressure from investors including hedge fund manager David Einhorn of Greenlight Capital Inc. to return more of its cash. This was the first increase since Apple reinstated dividends last year.

“The fact that they’re open to using debt will be very heartening to shareholders,” said Ryan Jacob, chief investment officer of Jacob Asset Management. “It’s basic capital management. When you’re as large and creditworthy as Apple with rates as low as they are, it’s a pretty compelling proposition.”

Standard & Poor’s gave the company its AA+ grade, the second-highest level of investment grade, and Moody’s Investors Service ranked Apple an equivalent Aa1, according to statements issued by the ratings firms. Apple has no outstanding bonds, according to data compiled by Bloomberg.

Apple (AAPL) was little changed in late trading after rising as much as 5.9 percent to $429.90 after results were released.

Samsung Rivalry

The shares had gained 1.9 percent to $406.13 at the close in New York, and have tumbled 24 percent this year, making it the seventh-worst performer in the Standard & Poor’s 500 Index (SPX).

Apple sold 37.4 million units of the iPhone, compared with 35.1 million a year earlier -- when iPhone revenue surged 85 percent. Apple sold 19.5 million iPads, compared to the 18.5 million predicted by analysts in the Bloomberg survey. It also sold 4 million Mac computers, compared with a 4.1 million estimate.

One of Apple’s chief competitors is Samsung (005930), which in March unveiled the Galaxy S4 to challenge the iPhone in the high-end smartphone market. The Suwon, South Korea-based company is the world’s largest seller of handsets and relies on a strategy of using a wide range of devices. Apple, by contrast, tends to release a limited number of products a year.

Apple’s slowing growth is affecting its network of suppliers. Hon Hai Precision Industry Co., the company that assembles many of Apple’s products in China, this month reported the biggest sales decline in at least 13 years. LG Display Co (034220). this week posted first-quarter profit below analysts’ estimates on falling sales of smaller displays used by Apple. Cirrus Logic Inc (CRUS)., which supplies audio chips to Apple, also reported weaker- than-projected results last week.
 樓主| 發表於 2013-4-24 09:18:16 | 顯示全部樓層

Apple Plans to Borrow to Fund Bigger Capital-Return Program

by Matt Robinson - Apr 23, 2013, Bloomberg

Apple Inc. (AAPL), the debt-free maker of the iPhone, said it plans to borrow to help finance an expanded program to return capital to shareholders.

Apple will sell an unspecified amount of debt as it returns $55 billion in cash to equity investors in a push to compensate for a share price that’s been hammered by signs of slower growth. The company has no outstanding bonds, according to data compiled by Bloomberg.

“The company plans to borrow and expects to announce more details about this in the near future,” Cupertino, California- based Apple said in a statement as it reported fiscal second-quarter net income that fell 18 percent to $9.55 billion, or $10.09 a share.

Standard & Poor’s gave the company its AA+ grade, the second-highest level of investment grade, and Moody’s Investors Service ranked Apple an equivalent Aa1, according to statements issued by the ratings firms.

Apple may be lifted to Moody’s top Aaa grade if changes in U.S. corporate tax laws allow the company to repatriate cash held overseas on a more tax-efficient basis, reducing the need to borrow, wrote Gerald Granovsky, a senior vice president in that ratings firm’s corporate finance group.

At S&P, analyst Martha P. Toll-Reed wrote that Apple’s potential for an upgrade is “constrained” by “highly competitive and rapidly evolving market conditions.”

Apple could potentially sell $21.3 billion of debt and still have the average debt-to-equity ratio of a top-rated company, Bloomberg data show.
 樓主| 發表於 2013-5-1 21:51:31 | 顯示全部樓層
1 May 2013 Last updated at 00:45 GMT, BBC
Apple taps markets for record $17bn funding


Apple has raised $17bn (£10.9bn) via a bond sale, the biggest ever by a non-banking company, to help fund its plan for extra payouts to shareholders.

details: http://www.bbc.co.uk/news/business-22361840
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