Did Apple's Cash Holdings Of $146.8 Billion Just Peak?

Tyler Durden's picture

While the market is focused on AAPL's income statement, we decided to take a quick glance at its balance sheet, where we looked at - what else - its infamous cash hoard. Once the envy of every company in the universe, AAPL's cash and equivalents, while still very impressive at a record $146.8 billion, is potentially a reason of concern. Because while AAPL's Q4 $9.9 billion in cash from operations were certainly impressive as a result of the company's recent shareholder friendly overtures it has been burning cash at a far faster clip than in prior quarters and spent $7.8 billion in Q4 in dividends and share buybacks. So much so, that the amount by which its total cash holdings grew in the quarter was a tiny $140 million, a far cry from prior quarters when it generated billions in cash in any given quarter. So one wonders: was this the peak for the most fantastic cash balance growth in history?

We hope to have the breakdown of domestic vs foreign cash soon, although if prior quarters are any indication, this is the 3rd consecutive quarter in which domestic cash has declined and will force the firm to either repatriate some of its offshore cash, or issue even more debt.

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John McCloy's picture

   Are they not the largest hedgefund in the world however? Maybe they start using their free cash to buy SPYS...surely that is the move right? Lif their own stock and enjoy all the mania...whooopee doodles. 


nope-1004's picture

Wonder what that bell curve would look like if one extrapolated it further?

Ya... that's right.  AAPL is done.  Icahn will cry.  I will laugh.


Herd Redirection Committee's picture

Theres almost 0% chance any of it is in cash, or even in just regular bank deposits.

Cash in this case is just an accounting term, likely for short-term debt or, the safest most guaranteedest investment in the world, Treasuries.

notbot's picture

Generally a fan of ZH, but this is sloppy. Their C4Q will generate about $12bn+ in cash.

These 2 qtrs are seasonal/product cycle lulls.



GMadScientist's picture

$7B pure cash, $7.3B MMF, $50B in securities, and $43.6B in Ts. $102B of the hoard is offshore.


Freddie's picture

Is offshore really offshore or in Nevada offshore?

Slave labor in China generates billions.  Also helped by sheep customers who like buying devices that spy on them.

Winston Churchill's picture

The FedRes has that title, or more accurately the worlds biggest insolvent hedge fund.

Something doesn't add up.What happened to the pile of cash Apple  raked in with their

bond issue ?

TideFighter's picture

Time to Tweet the Peak

heinrich6666's picture

Austrian economists say: money in Apple is money robbed from the PUBLIC SECTOR.

yogibear's picture

Sure looks like it. Time to take your money off the table? That special feeling with Apple is gone.

It's had a real nice and long run. With Jobs gone you can see the reason.  Unfortunately few people can replace Jobs. Cook is not one of them.

Sure, fund mangers will hold. Don't want to be around when they start dumping.





adr's picture

It wasn't Jobs leaving. It is the natural product lifecycle of hipness.

Stage 1

New product anointed as coolest thing on planet Earth. Celebrities and hipsters rush to buy and proclaim their coolness.

Stage 2

Wannabe followers want to emulate the cool celebrities and rush to buy the product. IF I WEAR THE SAME SHIRT AS KIM KARDASHIAN I'M AS HOT AND COOL AS KIM KARDASHIAN!!!

Stage 3

Celebrities and hipsters see white trash carrying around the hot product, not wanting to be associated with people they see as trash, they find a new product.

Stage 4

With no celebrity push, and market saturation the product becomes uncool and sales plummet.


This usually takes around five to six years to play out, with around four years of peak sales. One year is essentially the seeding year, building up support, the final year is the dropoff which happens incredibly quick. 2007 + five years = 2012, pretty much the high point of the iPhone with the iPhone 4. You can see the stagnation in 2013 and the loss of the coolness factor. 2014 should see a rapid drop in popularity.

Now Apple is in the enviable position of selling the phone all over the world, and other parts of the world are in different stages of the cycle. It doesn't matter though, because eventually the cycle will run its course everywhere.

A product may remain popular and sell well, but it will have turned into a commodity and will need to be priced as such. Margins will be low along with profits. Not the kind of thing that can justify insane stock valuations.

The 1990s was Microsoft's decade. It really didn't start until 1995 though. The popularity ramp of Windows 95 started slow, but with Windows 98 the popularity wave really started to grow. Microsoft peaked with Windows XP,and then declined rapidly.

Apple mirrors Microsoft almost perfectly.

KCCO's picture

I think the buyback started.. they returned like 10 billion in dividends and buyback.  So after 10 billion paid in quarter thats still impressive to add to balance sheet.. 

Sun and Moon's picture

"shareholder friendly overtures"

Stock buybacks are management friendly, not shareholder friendly. Their purpose is to sop up the shares given to managers in the form of stock and stock option grants. Any money spent for share buybacks should be subtracted from earnings when computing P/E ratios.

yogibear's picture

Not what one would call stellar and an improvement. 


The Company posted quarterly revenue of $37.5 billion and quarterly net profit of $7.5 billion, or $8.26 per diluted share. These results compare to revenue of $36 billion and net profit of $8.2 billion, or $8.67 per diluted share, in the year-ago quarter. Gross margin was 37 percent compared to 40 percent in the year-ago quarter. 

adr's picture

Watch out, people don't like facts like that.

Herd Redirection Committee's picture

I can see Apple making some fat profits for another 3 years, with worldwide markets still likely to adore the iPhone for a while yet.

But then what?  This is where Cook fails.  He is a logistics guy.  He probably came up with ideas like "different colors" and "lets make it thinner", not new products.

GMadScientist's picture

Tim came up with the tax avoidance schemes that created that pile; he has peons for that "idea" bullshit.

tony wilson's picture

with a cash pile like that

at apple

and a gold pile like that with gadaffi in libya.

one can see why those 2  goy had 2 die.

skull and bones bitches.

Serfs_Up's picture

Its really gonna suck when that pile of paper only buys a bowl of watered - down cabbage soup

ILikeBoats's picture

Question, of the billions in stock buyback, how much went to insiders and the connected as opposed to regular Joe Investor and non-connected mutual funds?

TaperProof's picture

146 billion?   Thats like 146 affordablecare.gov web sites! whoa!

WallowaMountainMan's picture

"while still very impressive at a record $146.8 billion"



sell sell sell !!!!



RSDallas's picture

Apple will be filling for bankruptcy within 7 years. This piece of crap I pad I am using doesn't even play most of the videos on the internet and does not have a button that I can advance and reverse my text marker.

GMadScientist's picture

$200k per registered iOS developer. w00t!

dreadnaught's picture

(yawn) nothing to see here people...move along