We all know that Apple is immensely successful. After all, it briefly overtook oil-giant Exxon to become the most valuable company on Earth earlier this year. During its quarterly earnings conference call, though, Chief Fininacial Officer Peter Oppenheimer revealed exactly how big the Cupertino-based giant’s hoard really is.
Oppenheimer announced that Apple has about US$81.1-billion tucked away in cash and investments, adding that about two-thirds of this is made up of overseas investments.
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The iconic company also reported a record-high September quarter profit of US$6.62-billion on revenue of US$28.27-billion boosted by iPad sales that nearly tripled to 11.12-million in comparison with the same period last year.
According to specialist news site Apple Insider, Oppenheimer “went out of his way” to mention the offshore investments.
One possible reason for this emphasis, Apple Insider suggests, is the fact that Apple is part of a group of US corporations backing a tax holiday for corporations with overseas holdings.
Along with the likes of Cisco, Duke Energy, Oracle and Pfizer, Apple is pushing for a one-time tax break on an estimated US$1-trillion held by corporations in offshore accounts.
These companies currently face a 35% tax on profit generated outside the US.
Under the proposed plan, Apple Insider says, “companies would benefit from a temporary tax break with a tax rate of just five percent in a one-year period. The companies have said they could justify the tax break by investing the funds in research, hiring and other domestic spending that could benefit the U.S. economy”.
It is also worthwhile noting that the US$81-billion figure could have been even higher had Apple not been forced to fork out for the now infamous Nortel payments and a legal settlement and licensing agreement with Nokia. Lower-than-expected sales of the iPhone also saw revenues fail to reach anticipated heights.
The company was nonetheless buoyant in the wake of the announcement.
“We are thrilled with the very strong finish of an outstanding fiscal 2011, growing annual revenue to US$108-billion and growing earnings to US$26-billion,” said Apple chief executive Tim Cook.
“Customer response to iPhone 4S has been fantastic, we have strong momentum going into the holiday season, and we remain really enthusiastic about our product pipeline.”
Strong as Apple’s earnings for the past quarter may have been, they failed to meet the expectations of Wall Street investors.
The company’s stock slid more than six percent in the wake of the earnings call.
According to renowned Silicon Valley analyst Rob Endearle, this was the second miss for Apple when it came to market expectations.
“Steve Jobs always beat the street because he was expert at managing expectations,” Enderle said, noting that the stock was punished because Wall Street thought Apple’s fourth quarter earnings would be better.
And while the new iPhone 4S is superb, people had anticipated a dazzlingly different fifth-generation Apple smartphone, according to Enderle.
Cook is nonetheless confident that the 4S will set new benchmarks for iPhone sales.
“I am confident we will set an all-time record for iPhone this quarter,” Cook said during the earnings conference call.
“In our wildest dreams we couldn’t have gotten off to as good a start as we did with the 4S.”
Cook also said iPad sales are cannibalizing desktop computer and laptop sales, but that the biggest bite is coming out of the market for machines powered by Microsoft’s Windows operating systems.
“We are coming out very well in the cannibalisation category,” Cook said, noting that Macintosh sales in the past quarter were at a record high.
“With cannibalisation like this, I hope it continues,” but he declined to comment on patent battles that Apple is fighting with makers of Android-powered smartphones and tablets in an array of courts.
