Apple Reports $1.61 Billion Profit for Q1 2009

[BuddyTronic]

I wish someone would have asked on the phone conference if Apple has considered paying a dividend to shareholders?

If Apple pays shareholders a dividend, it will help to stabilize the stock price - more people will hold on to shares with a dividend payed out.

Why doesn't Apple pay dividends?

 

[SactoGuy18]

Apple will not update the iMac and Mac Pro until they can get assurances on a stable supply of Intel's newest quad-core CPU's (Core i7 for iMacs, Gainestown Xeons for the Mac Pros). Expect the new machines coming around April 2009.

 

[teme]

I don't understand why everyone thinks that Apple can't get profit margin from a possible consumer desktop. Yes, there are lots of competitors there, but Apple could easily put a higher price for their machines, as they do with their every other computer too. People who want the cheapest desktop tower could buy it from other manufacturers, and people who like Apple are willing to pay more as usually.

By the way, I think the rumors about Mac Mini with Intel Atom are not very reliable anymore, because the comment from Cook about netbooks: "but from our [point of view] the products are based on hardware that's much less powerful"... I think he wouldn't blame hardware less powerful if it's gonna be used in Mac Mini.

 

[Evangelion]

Q: What about the netbook (<$500) segment?

A: We're watching it, but we don't feel that they offer good products...underpowered, poor software, cramped keyboards, etc. We've got some ideas, but we will not provide the inferior experience that we believe other companies are providing.

Confirmed. Apple has a product in the pipeline that targets this segment. They have moved from the "that market sucks!"-comments to the "existing products in that market sucks"-comments.

 

[tjcampbell]

I wonder how App Store sales are going... I personally have yet to actually purchase an app from the App Store. Interesting that it appears to be a sensitive subject...

I have about fifteen friends with iPhones and we all buy apps. I buy at least one a week and as they improve I will buy more.

 

[gnasher729]

I wish someone would have asked on the phone conference if Apple has considered paying a dividend to shareholders?

If Apple pays shareholders a dividend, it will help to stabilize the stock price - more people will hold on to shares with a dividend payed out.

Why doesn't Apple pay dividends?

Every dollar dividend paid means the value of the company and the share price go down by one dollar. And if you haven't noticed: Apple tries to make the best computers and other devices in the world and increase the value of the company that way. They don't care one damn about idiot investors.

 

[Watabou]

I wonder how App Store sales are going... I personally have yet to actually purchase an app from the App Store. Interesting that it appears to be a sensitive subject...

I bet most of them are free. I know I download random apps just to try them, and end up deleting it.


Anyways, I used to only download free apps. But I couldn't resist.

Sp now, I tend to buy an app every two weeks, that is if there is a "must-have app" like rolando or hero of sparta etc.

 

[bmk]

I wish someone would have asked on the phone conference if Apple has considered paying a dividend to shareholders?

If Apple pays shareholders a dividend, it will help to stabilize the stock price - more people will hold on to shares with a dividend payed out.

If there's one thing that anyone - including you as an investor or shareholder - should have realised by now it is that the stock market's value has nothing whatsoever to do with the value or worth of the companies whose stocks are traded. It may have been in the past, but it is not so now - the market is the province of speculators and they don't care which company makes good stuff, which makes rubbish, who gives a dividend or not. They are after profit, by any means. The stock market - and the belief that everyone seems to have that it needs to be pampered and appeased rather than regulated and curtailed - has been one of the single worst factors in the whole financial meltdown.

 

[Evangelion]

I wish someone would have asked on the phone conference if Apple has considered paying a dividend to shareholders?

Why should tghey waste their money on that? They should use that money on new products and as a buffer to secure them from financial uncertainity.

If Apple pays shareholders a dividend, it will help to stabilize the stock price - more people will hold on to shares with a dividend payed out.

The dividend would few few bucks per share. And when MS finally paid dividends, their shareprice went down, because many investors saw that as a transition from fast-growing growth-company in to stable blue-chip company.

Why doesn't Apple pay dividends?

Because they have better things to do with that money than throw it all away.

 

[Rot'nApple]

"iPhone competitors: We view iPhone as primarily a software platform, which is different from our competitors. We don't mind competition, but if others rip off our intellectual property, we will go after them."

Uh, Can we have a list of Apple's iPhone intellectual property? I could have sworn that some of the characteristics of some of the competitive touch screen smart phones being introduced, already violated Apple's intellectual property, but apparently since there is no lawsuits and injunctions stopping competitors products, then I guess I am wrong!

Go !

 

[lftrghtparadigm]

'best quarterly revenue and earnings in Apple's history.'


that was we really needed

Go

 

[lftrghtparadigm]

"iPhone competitors: We view iPhone as primarily a software platform, which is different from our competitors. We don't mind competition, but if others rip off our intellectual property, we will go after them."

Uh, Can we have a list of Apple's iPhone intellectual property? I could have sworn that some of the characteristics of some of the competitive touch screen smart phones being introduced, already violated Apple's intellectual property, but apparently since there is no lawsuits and injunctions stopping competitors products, then I guess I am wrong!

Go !

None that we are publicly aware of. Apple certainly handles smaller matters in private and settles them. When an issue cannot be settled, or they feel it is a direct attempt at being combative (like Pystar), they publicize it in order to sway opinion in their favor.

I've been hands on with most of the new touch products and while some features feel like they are certainly ripped off the iPhone, there are many ways that these features are so inferior that it creates enough of a difference.

The people that Apple would publicly go after are ones that succeed in stealing iPhone features and recreating them well. This has not happen yet, at least not on the LG Dare, Blackberry touch, Palm Pre, or Google pHone. They all suck miserably.

 

[lftrghtparadigm]

I wish someone would have asked on the phone conference if Apple has considered paying a dividend to shareholders?

If Apple pays shareholders a dividend, it will help to stabilize the stock price - more people will hold on to shares with a dividend payed out.

Why doesn't Apple pay dividends?

Right lets start handing out gifts and stall the progress of the company.

Dividends are for: Corporations who have a steady cash flow, with:

1. No interest in growth, development, or improvement of any kind.

2. No interest in change. The current system, unchanged, makes just enough to pay dividends and leak massive sums into the pockets of the board members.

Cash is the most valuable asset a company can have (assuming that cash isn't the American dollar in the year 2009), theoretically.

Its common knowledge that, in any large public company, you can EITHER:

1. Pay dividends
or
2. Run a great company

If you are a technology company, Its also common knowledge that you can EITHER:

1. Pay dividends
or
2. Have a R&D department

One of the two needs to use the available cash.

 

[IJ Reilly]

Every dollar dividend paid means the value of the company and the share price go down by one dollar. And if you haven't noticed: Apple tries to make the best computers and other devices in the world and increase the value of the company that way. They don't care one damn about idiot investors.

I can't agree with this. Apple already has the highest cash to market cap ratio of all the technology companies. Investors barely notice. Apple is currently accumulating cash at the rate of around $3 billion per quarter, a rate which is almost certain to increase. A very healthy divided (for a tech company) of $1.00/share would cost them a measly $800 million a year -- little more than a dent in their ever-growing vault of cash. Declaring a dividend would, as the poster who mentioned this suggested, stabilize the stock price. Sadly, Apple's board stubbornly refuses to do some things which a grown-up company should do. Declaring a dividend is one of them.

Those who claim that Apple can't pay a dividend to stockholders and do R&D, or that they've got plans for all that money, are plainly wrong.

 

[BuddyTronic]

Right lets start handing out gifts and stall the progress of the company.

Dividends are for: Corporations who have a steady cash flow, with:

1. No interest in growth, development, or improvement of any kind.

2. No interest in change. The current system, unchanged, makes just enough to pay dividends and leak massive sums into the pockets of the board members.

Cash is the most valuable asset a company can have (assuming that cash isn't the American dollar in the year 2009), theoretically.

Its common knowledge that, in any large public company, you can EITHER:

1. Pay dividends
or
2. Run a great company

If you are a technology company, Its also common knowledge that you can EITHER:

1. Pay dividends
or
2. Have a R&D department

One of the two needs to use the available cash.

I disagree.

Apple has been subjected to great market manipulation by several key stock analysts and other characters of the media (most of them sponsored by kickbacks from "the other side" I'd say).

By paying a dividend, I think it would allow AAPL shares to get more grip on the upside, instead of being so volatile. Apple should do it just to keep the volatility in check a little bit.

You'd have a huge number of buyers for AAPL stock if they paid a dividend. I mean, I have friends buying T-bills at a loss right now. Apple is pretty solid and everyone knows it, a dividend would really increase the appeal of holding this stock.

It would discourage dumping of the stock on the first hint of negativity from those so very wise stock analysts who don't have a clue about AAPL stock, and are being paid off to smear it.

I can't agree with this. Apple already has the highest cash to market cap ratio of all the technology companies. Investors barely notice. Apple is currently accumulating cash at the rate of around $3 billion per quarter, a rate which is almost certain to increase. A very healthy divided (for a tech company) of $1.00/share would cost them a measly $800 million a year -- little more than a dent in their ever-growing vault of cash. Declaring a dividend would, as the poster who mentioned this suggested, stabilize the stock price. Sadly, Apple's board stubbornly refuses to do some things which a grown-up company should do. Declaring a dividend is one of them.

Those who claim that Apple can't pay a dividend to stockholders and do R&D, or that they've got plans for all that money, are plainly wrong.

+1


So if anyone thinks they know why Apple does not pay dividends on AAPL shares, I'd still genuinely like to know why they do not pay dividends.

 

[Oxtail]

I think not paying a dividend is very much in AAPL's character as a company. You suggest that grown-up companies pay dividends. Well, AAPL would not be where it is today if it acted like all those other grown-up companies. Grown-up companies take very calculated risks. They don't do things like kill the iPod mini when it's the most popular product in their line. They don't launch into mobile phones when everyone else thinks it's a bad idea in a market they have no experience in.

AAPL exists to make great computers and electronic gadgets. They really don't care about appeasing the analysts and the markets. And that lends a mystique to the company as a whole that other firms would kill for.

AAPL's price moves tremendously when you consider how large their market cap is. The market treats them more like an up-and-coming tech firm with a lot of built-in risk as well as tremendous potential and not like the stodgy blue-chip tech firm that their huge market cap would suggest they are. I think AAPL likes it this way.

 

[CharlesX]

Dividends are for companies that have a steady and predictable cash flow, like utilities and other regulated monopolies. It helps keep the stock valuable because they don't have much room left to grow. If you want to create new products, spend a lot of money on R&D, and grow, you just don't pay dividends.

 

[IJ Reilly]

I think not paying a dividend is very much in AAPL's character as a company. You suggest that grown-up companies pay dividends. Well, AAPL would not be where it is today if it acted like all those other grown-up companies. Grown-up companies take very calculated risks. They don't do things like kill the iPod mini when it's the most popular product in their line. They don't launch into mobile phones when everyone else thinks it's a bad idea in a market they have no experience in.

Paying a dividend has nothing to do with taking risks with new products. A company that has accumulated this much cash should either (1) reinvest it in the business, or (2) give some of it to the stockholders. Since there is no way on God's green earth that Apple can spend the money they are accumulating (and no indication that they will), the other option makes more sense.

Dividends are for companies that have a steady and predictable cash flow, like utilities and other regulated monopolies. It helps keep the stock valuable because they don't have much room left to grow. If you want to create new products, spend a lot of money on R&D, and grow, you just don't pay dividends.

No, not really. Apple is not going to spend even a small fraction of the cash they've accumulated on R&D, and they could not do so without massively wasting it. The only conceivable way they could spend even a moderate fraction of it is in a major acquisition -- which looks even less likely, and would probably be a terrible idea anyway.

 

[BuddyTronic]

Paying a dividend has nothing to do with taking risks with new products. A company that has accumulated this much cash should either (1) reinvest it in the business, or (2) give some of it to the stockholders. Since there is no way on God's green earth that Apple can spend the money they are accumulating (and no indication that they will), the other option makes more sense.



No, not really. Apple is not going to spend even a small fraction of the cash they've accumulated on R&D, and they could not do so without massively wasting it. The only conceivable way they could spend even a moderate fraction of it is in a major acquisition -- which looks even less likely, and would probably be a terrible idea anyway.

Thanks - this seems like a sensible agreement to the idea of paying dividends out with 28 billion cash on hand.

I agree, they can still do a lot of research and acquire companies like TIVO and NVIDIA and still have many billions left over.

If their share price goes up, it's even more available capital for Apple, and a dividend would help on this as I mentioned in my previous post - by causing more shares to be in demand and held long term. More so then without dividends and many fund managers listening to the idiotic stock analysts from the websites.

 

[Oxtail]

There are people who will not hold AAPL stock because they have money wasting away in a bank. That's a perfectly reasonable stance and those people haven't and probably won't invest in AAPL.

There are others who don't care that AAPL has almost $30 billion sitting there. Some of us are actually attracted by what we view as prudent and very conservative finances which boosts our confidence in the company as a whole.

I see no reason for AAPL to change the same strategy they've followed since they were valued at nothing minus their cash pile up to this day. You want a company that pays out or spends all the money it makes. There are plenty of companies like that out there. Heck, many companies spend money they don't even have to chase bigger growth! AAPL is NOT one of those companies. If that's what you want, there are plenty of technology firms which would better suit your criteria for not "wasting" money. None of them will have anywhere near the sterling balance sheets that AAPL does, though. Hmm, perhaps there is a correlation in there somewhere...

 

[IJ Reilly]

You want a company that pays out or spends all the money it makes.

Who does? Who said that?

 

[Oxtail]

Who does? Who said that?

So how much would be enough?

I just don't see the point in about complaining about something that is a vital part of AAPL's corporate character.

AAPL does not pay dividends. AAPL rarely, if ever, touches their cash reserves. AAPL is extremely secretive about everything, sometimes needlessly so. AAPL always gives conservative guidance. AAPL does a lot of things that are not what "grown-up" companies do. Why does AAPL need to change to be more like other companies which are suffering more and doing worse?

 

[IJ Reilly]

So how much would be enough?

I just don't see the point in about complaining about something that is a vital part of AAPL's corporate character.

AAPL does not pay dividends. AAPL rarely, if ever, touches their cash reserves. AAPL is extremely secretive about everything, sometimes needlessly so. AAPL always gives conservative guidance. AAPL does a lot of things that are not what "grown-up" companies do. Why does AAPL need to change to be more like other companies which are suffering more and doing worse?

It's not vital, it's historical. It's arbitrary. It's also out of date, considering the vast changes in Apple's financial condition over the last five years.

The game is called "capitalism." The way to win the game is by reinvestment of profits into growing the business. The simple, obvious fact is that Apple has been taking in cash at such a clip, that they cannot possibly reinvest any significance portion of it back into the business, unless they do something really foolish, like buy another large company.

So the other option is to give some of that fallow money to the stockholders, who are after all the owners of the company. As I said before, even a very healthy divided of $1.00/share would represent only about one month of Apple's free cash flow. It's an almost negligible amount, but still would make stockholder very happy, and would also message the markets that Apple isn't so worried about the future that they feel the need to stockpile tens of billions of dollars in cash against some future calamity.

 

[MattInOz]

Wasn't the Dividend questions covered in one of the previous Conference Calls.

Along the lines of "Once you pop, you can't stop"

They pay a health dividend this quarter to buy investor confidence, then they have to keep doing that same or better healthy dividend every quarter to hold investor confidence. If they don't pay anything or as much then the price tanks regardless of other factors which may show the company is strong.

Soon enough no cash left and no money to grow the company.
Which is why growing companies don't pay dividends unless they did from day one.

 

[Oxtail]

I would suggest that AAPL is not in business to win at the game of capitalism. AAPL exists to create cool products that AAPL employess are proud of.

Other companies are much better at the game of capitalism. They do not seem to be doing as well as AAPL these days, though. Are they closer to winning?

BTW, the game of capitalism does call for ALL cash reserves to be spent or returned to the stockholder. Because cash sitting in a bank is not being productive. So by suggesting that AAPL keep some of it around, you're already forsaking some of the rules of the game.