Apple, Inc. Needs More Cashhttp://www.fool.com/investing/general/2014/02/13/apple-inc-needs-more-cash.aspx Evan Niu, CFA
February 13, 2014
"Opportunistic." That's how Apple (NASDAQ: AAPL) CEO Tim Cook characterized the decision to repurchase $14 billion in stock over the past couple weeks in an interview with The Wall Street Journal a week ago. I couldn't have put it better myself:
Chances are that you think Apple has more cash than it could possibly need. In a way, you'd be absolutely right. In another way, you'd be dead wrong.
Domestic cash is king
The Mac maker's domestic operating cash flow will certainly help cover the bill, but that figure is hard to quantify. Investors can look at total domestic cash flow to get an approximation. In the six quarters prior to initiating its capital return program in 2012, Apple was adding an average of $3 billion per quarter to its domestic stash.
For the past several quarters, Apple's domestic cash has been on the decline, in large part due to its aggressive share repurchase activity and dividend payouts, which totaled $7.8 billion last quarter.
History repeats itself
Much like last summer, Apple just conducted another accelerated share repurchase program to buy back $12 billion in stock, in addition to $2 billion in open market purchases.