Apple Cash Balance Rises At Slowest Pace In 30 Months

Tyler Durden's picture

For a company that recently had a $600 billion market cap, for which scale is everything, and for which every sentence begins with "if you exclude its cash, its multiple is" two things have to be consistent: it has to keep growing its cash, and said growth has to be proportional to the firm's scale. For Apple, in Q3 the first condition was satisfied... but just barely. Total cash and equivalents did rise from $117.2 billion to $121.3 billion, but the rate of sequential increase, which was only $4.1 billion, was the slowest increase in cash and equivalents since March 2010, when Apple's total cash load was a far more modest $41.7 billion, as was its market cap. While AAPL continues to be a growth juggernaut, in its pursuit to appease Wall Street with dividends and other guimmicks, is it starting to lose the big picture, which is and always has been about generating cash flow? And how long until the organic growth to cash generation is not even enough to cover the dividend outflow? What happens if and when AAPL actually has cash decline in one quarter? Finally, is it time for the infamous Braeburn Capital to show Simon Potter who truly is boss?

Total cash:

Sequential change:

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Duke of Con Dao's picture

Apple meet Microsoft, Microsoft meet Apple! 

...

the short of the century! IMHO

some new eye candy... (starring De Niro and Cusack)

YouTube - Too Many TV Ads, Speeches, Debates, Emails & Robo-Calls: Here's a Voter Who Can't Take It Anymore!

slaughterer's picture

AAPL really killed it in March 2012 with cash generation (which launched the recent euphoric rally): a performance never to be repeated.   

economics9698's picture

A quick easy way to bypass the CPI and get a much more realistic evaluation of the inflation rate is very simple and easy to do.  Find the nominal GDP of selected year.

http://research.stlouisfed.org/fred2/graph/?s[1][id]=GDPA

1982 nominal GDP = $3.2532 trillion

Find a official CPI internet calculator, I use this one.

http://www.shadowstats.com/inflation_calculator?amount1=100&y1=1971&m1=10&y2=2011&m2=10&calc=Find+Out

Convert the 1982 GDP to today’s dollars.

2011 January GDP conversion is $7.60 trillion.

2011 actual GDP is $15.0757

Difference 1.98 times.

Its crude but effective way of cutting through the crap since I am too cheap to pay John  Williams to do it for me.

 

TruthInSunshine's picture

The President's Working Group On Financial Markets (aka The Bernank + Timmay) is absolutely RAPING the buy button in the futures about now.

MillionDollarBogus_'s picture

Is Apple's cash flow slowdown the canary in the coal mine indicator that bailing out of equities is now an absolute...???

I still see big crowds in Starbucks...

Restaurants seem to be staying busy...

Silver Bug's picture

The great apple gravy train is grinding to a halt. Hopefully a fraction of these people will move their money into gold and silver.

 

http://ericsprott.blogspot.ca/

yogibear's picture

Apple is goimg to look like Microsoft once the Steve jobs pipeline runs out.

Tom Cook is no Steve Jobs, just another cookie-cutter MBA acting like Jobs.

 

DUNTHAT's picture

HOUSTON WE HAVE A PROBLEM !!

Duke of Con Dao's picture

Cook is a so-called 'supply chain' genuis...

words of very faint praise, indeed. 

he'll be remembered like the coach who followed Johnny Wooden. 

seek's picture

This would be happening even if Steve was alive.

There is no escaping the black hole that is the Bernankalypse. It will suck in and destroy everything but it's mortal enemy before this is done.

NotApplicable's picture

I think this point needs to be repeated ad infinitum as people obviously do not yet realize the level of destruction that accompanies the monetization of what should've been bad debt.

machineh's picture

Shit, I guess patent trolling isn't as profitable as it's made out to be!

JPM Hater001's picture

Something's eating at the Apple...

Zero Govt's picture

"..is it starting to lose the big picture, which is and always has been about generating cash flow? And how long until the organic growth to cash generation is not even enough to cover the dividend outflow? What happens if and when AAPL actually has cash decline in one quarter? Finally, is it time for the infamous Braeburn Capital to show Simon Potter who truly is boss?"

I think I've had a word with this 20-Questions-Before-Breakfast ZH journalist before ...on that occasion I nicely pointed out there is no point (ie, pointless) chucking 20 questions at your machinegun-dizzy audience if you don't get off your arse, do some research and answer your own friggin questions

Go find some answers slacker

ziggy59's picture

TD, where do you get those toys?

blu's picture

Snarky Tyler is snarky.

Zero Govt's picture

Yes thanks TD, nifty link that :)

still doesn't answer the 20 questions before breakfast though

shall i Google them all or could journo come back with some reasearch positing an outcome to his speculative questions?

Example 1. " how long until the organic growth to cash generation is not even enough to cover the dividend outflow? "

bang an email to Reggie is an option to rhetorically answer that rhetorical (cough) question... no harm done lifting a finger ...he might get an answer which rhetorically makes his question null and void

jcaz's picture

Sorry, still no idea what you're babbling on about....

Quit trying so hard to be pretentious-  we're not mistaking your drivel for intellectual prowness....

BTW, try lifting a finger yourself and use proper grammar/punctuation....

Lifting a finger here.....

Zero Govt's picture

Jcaz  -  when i get asked 5 questions on the trot i've no idea what the answers are i feel a little, well, stupid! Anyone does. 

Don't mind a journo or anyone throwing the odd question in the air but when it becomes a series of un-answerable questions i wonder what the heckaroo he's doing to his audience!

My apologies for the "slacker" comment to him/her, bit harsh in the heat of the moment (i was dizzy!) which i tried to edit out but comment section wouldn't let me back in. 

And the other issue is the questions are always slanted to "what if ...the worst happened to AAPL?" Again no problem with speculative questions but why the consistent slant to destabalise! If we're speculating about Apple how about on some beats, they do have a tendancy to out-perform like no other company on the planet

Zero Govt's picture

that Minister is sooo going to get whacked/droned

ziggy59's picture

Apple.. Is that a worm in you or are you just unhappy to see me?

vix is for kids's picture

So now "increase in percentage cash-on-hand" is the metric-du-jour?  What would we ZH'ers say if some CNBC shill criticized a gold miner for a deceleration in its percentage of additional cash-on-hand?

Rainman's picture

APPLEs to oranges. The gold miners don't have to pay a big undertable vig to Chinese High Command.

fuu's picture

Television rots your brain.

slaughterer's picture

Now that these earnings are out, market can revert to its normal Fed-induced ramp-fest.  

Ignore all fundamentals, full speed ahead to the Tom Lee target in the sky.  

tooriskytoinvest's picture

Tim Cook is Bullshitting! Why he’s cutting Q4 forecast by so much while saying Iphone 5?s demand is “extremely robust” and output has improved and their margins has improved!

blu's picture

Yeah well just wait until Steve Jobs kicks the bucket, then their market cap will drop to zero over night.

Thecomingcollapse's picture

Please God tell me you forgot the sarc tag!

Rearranging Deckchairs's picture

Thanks Apple for announcing the move into streaming radio! My Pandora out of the money puts tripled in value.

 

I don't understand this market anymore! Its like no one remembers the dot com 1.0 bust. Same kind of metrics being played out. Huge P/Es or worse companies that aren't profitable and have a very small likelihood of ever paying a dividend.

 

I think most of the web 2.0 companies are way overvalued. I would include facebook, yelp, pandora, zynga, linkedin and groupon. If your business model sucks, have limited revenue opportunities, and there are no real barriers to entry there is no where else for your stock to go but down. Until your profitable they should be penny stocks.

These valuation multiples are insane.!

mdtrader's picture

They sold 27 million iPhones in the quarter, a quarter where everybody was waiting for iPhone 5 remember! Expect the cash growth to rocket back as iPhone 5 sales ramp up and the new iPad mini gets going. What has happened to this site? It used to be good when it started. Now it's just the inverse of CNBC, whereby its only mission is to twist and present numbers to make the bear case.  

Sheriff Douchenik from AZ's picture

CNBC twists and presents numbers to make the bullcase and shill. ZH merely untwists it so you can make a more levelheaded decision. But go ahead and reply from your already out of date ipad mini1.