Page 24 - ARUBA TODAY

A24 TECHNOLOGY
Thursday 3 May 2018
Apple's tax break yields $102 billion boon for shareholders

By MICHAEL LIEDTKE, million iPhones during the
SAN JOSE, Calif. (AP) — Ap- first three months of the
ple's tax break on its over- year, up by just 3 percent
seas profits is turning into a from 2017. Boosted by the
$102 billion boon for share- expensive iPhone X, Ap-
holders. ple fetched an average
The iPhone maker is raising of $728 per iPhone in this
its quarterly dividend by year's quarter, an 11 per-
16 percent to 73 cents per cent gain from last year's
share, matching the larg- average of $655.
est increase since Apple That helped the compa-
restored the payment un- ny earn nearly $14 billion
der shareholder pressure six in its fiscal second quar-
years ago. Raising the divi- ter, a 25 percent increase
dend by 10 cents per share from a year ago. Revenue
will cost Apple an addition- climbed 16 percent to $61
al $2 billion annually, based billion.
on its current outstanding In recent weeks, Apple's
stock. stock has backed off from
Apple also will spend $100 its all-time high of $183.50
billion more buying back because of concerns
its stock, a move that will about iPhone X demand,
enrich shareholders by Apple iPhone X sits on display at the new Apple Michigan Avenue store along the Chicago River though expectations of
helping to drive up the in Chicago. a dividend increase and
company's stock price. It stock buyback have off-
also reduces the number outside the U.S. during the to hire 20,000 more work- money coming in from set the decline. The stock
of shares trading, which in- past decade, thanks to the ers during the next five overseas, especially after gained more than 3 per-
creases earnings per share immense popularity of the years, including some at a the company said it intend- cent to $174.90 in Tuesday's
— a key yardstick for mea- iPhone and other products. planned new campus in a ed to eventually have little extended trading as inves-
suring a company's value. Apple CEO Tim Cook had still-to-be-identified U.S. city or no excess cash, after ac- tors celebrated the news of
Tuesday's announcement made it clear all that mon- outside California. counting for outstanding all the new money head-
marks the first time that Ap- ey would be left overseas The company plans to debt. That pledge implies ing their way. RBC analyst
ple has provided a glimpse if the tax on foreign profits spend $10 billion open- Apple still has $145 billion Amit Daryanani believes it
into how much its share- wasn't cut. Now, the Cu- ing and expanding data to spend, based on its net will take Apple four to five
holders will benefit from a pertino, California, com- centers in the U.S. and an- cash through March, down years to deplete its cash
sweeping overhaul of the pany is bringing most of the other $20 billion on other from $163 billion at the end reserves, assuming the
U.S. tax code championed money home in a move long-term projects, but it's of 2017. company doesn't make a
by President Donald Trump that will generate a $38 bil- unclear how much of that Wall Street's belief that huge acquisition. There has
and approved by Congress lion tax bill for Apple and a Apple would have spent Apple will pass along most been recurring speculation
late last year. windfall for shareholders. anyway. of its cash to sharehold- that Apple might try to buy
A provision in the pack- "Recent corporate tax re- It's also difficult to quantify ers has helped bolster its Netflix, a deal that would
age temporarily lowered form enables us to deploy how much of the repatriat- stock, even though its latest probably cost at least $150
the taxes that companies our global cash more effi- ed money is being funneled iPhones haven't spurred as billion and would break the
pay when they bring cash ciently," Cook told analysts to shareholders. Apple al- much sales growth as most mold for a company that
stashed overseas back to during a conference call. ready has been raising its investors hoped. The new has shunned major acquisi-
the U.S. That rate was cut Lawmakers have been dividend and spending on phones include the $1,000 tions through its history.
to 15.5 percent, far below hoping Apple and other buybacks every year since iPhone X, which Apple has Assuming Apple earmarks
the 35 percent that would companies would use the 2012; it's not known how touted as the best since the most of its cash for share-
have been imposed be- overseas cash to create much of the new increase first iPhone was introduced holders, Daryanani expects
fore. more jobs in the U.S. and would have happened re- in 2007. the company to reduce
No company benefited spend more on other proj- gardless of the tax break. IPhone sales once again the number of outstand-
more from that cut than ects that will help acceler- But investors have been disappointed Wall Street ing shares by 31 percent,
Apple, which had accumu- ate economic growth. counting on Apple to give in Apple's latest quarter. or roughly 1.6 billion shares,
lated more than $250 billion Apple previously promised shareholders much of the The company shipped 52.2 during the next five years.q
Spotify's 1st report as public

company flops on Wall Street

SAN FRANCISCO (AP) — subscribers began pay- would have 73 million to 76
Spotify's first quarterly re- ing for Spotify during the million subscribers a week
port as a public held com- first three months of the before its stock began trad-
pany struck the wrong note year. The gains announced ing on the New York Stock
with investors, even though Wednesday gave Spo- Exchange in early April.
its music-streaming service tify 75 million subscribers The stock hit a new high of
hit the subscriber growth through March to maintain $171.23 Wednesday before
target set by management a large lead over Apple's backtracking slightly and
In this April 3, 2018, file photo, a Spotify banner adorns the fa- just before its stock began music-streaming service, then tumbled 8 percent in
cade of the New York Stock Exchange. trading. which has about 40 million. extended trading after the
About four million more Spotify had projected it results were released.q