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  • The Ever-Changing World Of Apple [View article]
    China Dividend Mantra:

    I understand your point. But consider Apple is in the midst of the largest capital return program in enterprise history and is currently borrowing against foreign-sourced earnings to fund a massive share repurchase program.

    Although Apple declares a US tax liability on all foreign earnings not declared for permanent use outside the US, those dollars don’t become payable until the funds are repatriated to the US. In addition to the acquired debt to fund the share repurchase program, there’s more than $20 billion in liabilities for US tax payments on Apple’s balance sheet that are not due to be paid until the funds are repatriated.

    With more than 60% of revenue sourced outside the United States, the amount of available domestic cash to fund a “spectacular” dividend increase is limited. I don’t see a “large” dividend increase anytime soon and certainly not before the completion of the current $90 billion share repurchase program and any expansion of the program that might be announced in April.

    To fund a “spectacular” dividend increase as you suggest, it might require remitting billions of dollars in deferred tax payments to access the funds.

    Ideally, the US, which has among the highest corporate tax rates in the world, will offer at least a temporary tax holiday on the more than $2 trillion held offshore by US enterprises from foreign-sourced earnings. Better yet, a restructuring of US corporate tax rates to reduce current brackets might do a world of good in bringing foreign-sourced earnings back into the United States.

    Please remember the more shares Apple repurchases now, the greater likelihood of higher dividend payments in the future as the number of shares subject to dividends is reduced.
    Dec 28, 2014. 05:34 PM | 5 Likes Like |Link to Comment
  • The Ever-Changing World Of Apple [View article]
    ultraz2:

    Comparing the share price valuations of Apple and Amazon is an exercise in frustration. In my view, the primary driver of Apple’s valuation is net income and net income growth. The market has been quite patient with Amazon (despite the dramatic pullback in the share price) and appears to be value Amazon more on the potential for future earnings. While I don’t agree with the market’s valuation model for Amazon, the market doesn’t guarantee rational valuations for every equity every day.
    Dec 28, 2014. 05:15 PM | 2 Likes Like |Link to Comment
  • The Ever-Changing World Of Apple [View article]
    Tbeartoo:

    While I expect a dividend increase in April, Apple is currently borrowing money to fund the biggest cash return program in enterprise history through a combination of dividends and share repurchases. I don’t expect the dividend increase to be “large” at this time. The more shares repurchased now, the greater the potential for larger dividend increases later as the number of shares subject to dividends continues to be reduced.
    Dec 28, 2014. 05:08 PM | 1 Like Like |Link to Comment
  • The Ever-Changing World Of Apple [View article]
    Ooi:

    The tax issues are complex. Apple does declare a US tax liability on all foreign-sourced earnings not permanently dedicated to use outside the US and can take a credit against foreign taxes paid. The US has among the highest corporate tax rates in the industrialized world.

    While any increases in taxes are a concern, the far bigger issue is the prospect of a US tax reduction, if even temporarily, on foreign-sourced earnings repatriated to the United States. That would be of far greater benefit to Apple than the cost of seeing its EU corporate taxes rise. As of the end of the fiscal year, Apple had over $20 billion in deferred tax liabilities, primarily from foreign-sourced earnings yet to be repatriated to the United States and on which a US tax expense has already been realized.
    Dec 28, 2014. 03:33 PM | 1 Like Like |Link to Comment
  • The Ever-Changing World Of Apple [View article]
    China Dividend Mantra:

    While you might be waiting for a “spectacular” rise in the dividend, you might have to wait a lot longer. Apple is already among the largest dividend payers in the world and is currently distributing over $11 billion to shareholders through dividends on an annual basis. I consider that spectacular already.

    The dividend will rise in April. I don’t expect a 20% to 30% hike.
    Dec 28, 2014. 02:46 PM | 3 Likes Like |Link to Comment
  • The Ever-Changing World Of Apple [View article]
    Hannes:

    I believe all investors should approach the markets with caution. While analysts can provide helpful insights, no analyst has a perfect track record. I don’t actively follow Amazon, but at times I’ve been amazed by the company’s valuation considering the very thin margin on revenue and the company’s struggles to deliver a profit. I’m by no means or measure an expert, but I consider the company’s market cap exceedingly high no matter the efforts at revenue growth.
    Dec 28, 2014. 11:13 AM | 3 Likes Like |Link to Comment
  • The Ever-Changing World Of Apple [View article]
    rnsmith:

    I'm using the 5.864 billion share count as of October 10th to be the starting point for the quarter. At that time there were shares pending return to the company from an ASR (accelerated share repurchase program) that began in August as well whatever additional shares Apple repurchased and retired in the December quarter. But the share count will be averaged for the period.

    According to my records, Apple used 5.972 billion as the average fully diluted share count for the September quarter.
    Dec 28, 2014. 09:59 AM | 1 Like Like |Link to Comment
  • The Ever-Changing World Of Apple [View article]
    Andrew A:

    Thank you for your comment. As I mentioned above, I put more value on the qualitative analysis provided by Wall Street analysts than the price targets or revenue estimates published with the narrative. I consider the narrative provided by Katy Huberty on Apple to be about the best on Wall Street.

    Absent a release date for the Apple Watch, all revenue estimates for the fiscal year as well as price targets from the Wall Street pros will be tentative and subject to significant change.

    There are a number of ways Apple may surprise the Street this fiscal year. Apple’s revenue growth alone this fiscal year may equal or exceed the entire revenue of well over half of the enterprises in the Fortune 500 list.

    There’s plenty of room for analyst revenue, eps and price target revisions as we move through the fiscal year. But the narrative provided by analysts can be helpful in discerning growth trends.
    Dec 28, 2014. 09:52 AM | Likes Like |Link to Comment
  • The Ever-Changing World Of Apple [View article]
    I consider Katy Huberty’s narrative on Apple to be about the best on Wall Street. I put much more value on her qualitative analysis than her price targets. I expect price targets, in general, to rise as we move closer to the release of the Apple Watch and as Apple provides a firm release date for the new product line.
    Dec 28, 2014. 09:22 AM | 2 Likes Like |Link to Comment
  • The Ever-Changing World Of Apple [View article]
    rnsmith:

    The lack of a significant variance between the rate of estimated revenue growth and eps growth also caught my attention. Over the past few years I’ve noticed a trend in which analysts tend to be more conservative on their estimates of the percentage of revenue that flows to the net income line.

    According to the 10-K for FY2014, there was a significant difference in Apple’s fully diluted share count at the end of the September quarter than was reported for the quarter. This is because Apple averages the fully diluted share count for each quarter.

    On October 20, 2014, Apple reported 5.864 billion shares outstanding versus the split-adjusted 6.31 billion shares Apple used in the eps calculations for the December quarter last year.
    Dec 28, 2014. 09:10 AM | Likes Like |Link to Comment
  • The Ever-Changing World Of Apple [View article]
    Luciom:

    My double-digit revenue growth expectation for Europe is for the fiscal year, not just the December quarter.

    Apple deploys currency hedging strategies to mitigate some of the impact of currency fluctuations.

    There are two different exchange rates in play. The UK is among the biggest if not the biggest product market for Apple in Europe. While the GBP has also lost ground against the US Dollar, the currency fluctuation has not been quite as severe as the drop in the value of the Euro.

    In general, economic conditions in the EU have improved year-over-year.

    Network incompatibilities that impacted iPhone sales in Europe in prior years have been addressed with LTE capable iPhones.
    Dec 28, 2014. 09:00 AM | 5 Likes Like |Link to Comment
  • The Ever-Changing World Of Apple [View article]
    tino1126:

    While I consider Russia a long-term growth opportunity for Apple, I don’t think the recent crash of the Ruble will have a significant impact on the company’s global performance this quarter.
    I do expect a dividend increase to be announced in April. At this time I'm more interested in the number of shares repurchased and the number of shares outstanding at the end of the December quarter than the size of the 2015 dividend increase.
    Dec 28, 2014. 08:28 AM | 4 Likes Like |Link to Comment
  • The Ever-Changing World Of Apple [View article]
    69fasty:

    Thank you for your comment. I expect significant revisions to FY2015 revenue estimates from the Wall Street analysts as we move closer to the release of Apple’s newest product line.
    Dec 28, 2014. 03:20 AM | 7 Likes Like |Link to Comment
  • FY2015: Apple's Big Adventure [View article]
    richbar:

    Thank you for your comment. It's been a while. I am incorporating my early Apple Watch estimates in the numbers. I expect analyst estimates to rise as we move closer to the new product line's debut.

    As I mentioned in the article, I expect the strong uptake of the iPhone 6 handsets and overall iPhone unit sales alone to double last fiscal year's rate of revenue growth. That's prior to the influence of revenue from the new product line.
    Dec 3, 2014. 10:53 AM | 1 Like Like |Link to Comment
  • FY2015: Apple's Big Adventure [View article]
    Bill:

    Thank you for your comment. I have a few more metrics to cover in my next article.
    Nov 30, 2014. 08:47 PM | 1 Like Like |Link to Comment
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