Apple to host call on cash balances

Sun Mar 18, 2012 7:23pm EDT

1 of 16. Raindrops are seen in front of an Apple logo outside an Apple store in Shanghai February 22, 2012.

Credit: Reuters/Aly Song

(Reuters) - Apple Inc said it would host a conference call on Monday morning to discuss the outcome of discussions about its cash balance.

Apple has $98 billion in cash and securities, a hoard that has been drawing calls by investors to put the massive reserves to work.

Wall Street has increasingly bet that Apple will this year return cash to shareholders, taking their cue from Chief Executive Tim Cook's comments about "active discussions" at the top levels about the matter.

Cook recently said he had been "thinking very deeply" about investors' demands that the iPad and iPod maker return some of the cash to shareholders via a dividend.

"Frankly speaking, it's more than we need to run the company," Cook said at the annual shareholders meeting in February.

Analysts have said the return of cash to shareholders could take the form of a one-time dividend or share buyback to address a longstanding desire on the part of investors, while potentially opening the stock to a new class of investors who seek a dividend yield.

"A dividend makes sense," said Shaw Wu, analyst with Sterne Agee. The decision "is probably going to be pretty binary. It's going to be either yes or no. Many are hoping the answer is going to be yes.

"It's more likely they are considering it. I am not sure they are going to necessarily say it's to be effective immediately," Wu said.

On the possibility of a buyback, Wu said it would be possible, but the value to shareholders would be more questionable.

"The issue with (a) buyback is that the payback for investors is not as tangible. With a dividend, you get a check in the mail," Wu said.

Wu discounted the possibility of a stock split, saying it makes it more difficult to beat earnings consensus numbers.

Mounting anticipation over a buyback, along with hopes the newest iPad will keep sales momentum strong, helped propel Apple's stock to a record high this month past $600 a share.

The call, to be held at 9 a.m. EDT (1300 GMT) on Monday, will not provide an update on the current quarter nor will it touch upon any topics other than cash, Apple said in a statement on Sunday.

Apple declined to comment further on the press advisory.

(Reporting by Jessica Hall and Poornima Gupta; Editing by Dale Hudson and Leslie Adler)

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