Apple Inc. is facing a strange problem. The firm has a good amount of cash in its reserves, but is unable to get rid of it, and it’s attracting attention. The cash and investments of the iPhone maker saw a jump of 33% on YoY basis to stand at $206bn.
Apple cash reserves growing
Selling a phone priced as high as $650 at present is an enviable business model, and the firms growing piles of cash suggest the same. Apple has so much cash with itself that it can give every American $646, which almost equals the retail price of an iPhone, says a report from the USA Today.
Apple has made efforts to get rid of its cash, but it is only building up. During the quarter, the firm returned $17bn to its investors in the form of stock buybacks and dividends. Apple said previously it would send a total of $200B to its investors, and now it has already paid out $143 billion.
However, going forward, we may see some decline in Apple’s cash growth. Apple’s first big screen devices launched last year – iPhone 6 and iPhone 6 Plus – were sold in huge numbers. Following which several investors expressed concern that the financial bar has been set too high for Apple to hit similar growth this year.
And, the latest guidance from the firm could air their concerns.
Current quarter won’t be like the last
For the fiscal Q4 that ended on Sept 26, Apple Inc. reported earnings of $11.1bn or $1.96 per share on revenue of $51.5bn. The analysts forecasted earnings at $1.88 per share and revenue at $51.1bn. But, it cautioned that the current quarter results could not be as good as the last one. Apple’s revenue may not be able to meet the analyst’s expectations of $77bn, and might range $75.5bn to $77.5bn.
While announcing the results, Apple CEO Tim Cook said, “Fiscal 2015 was Apple’s most successful year ever, with revenue growing 28% to nearly $234 billion. We are heading into the holidays with our strongest product line-up yet.”
In pre-market trading today, Apple Inc. shares were up 1.93% at $114.55. Year to date, the stock is up almost 2% while in the last one-month, it is down almost 1%.