Apple reported spectacular Q1 results on Wednesday, blowing away analyst expectations by posting $89.6 billion in revenue and earnings of $1.40 per share. Those numbers beat Wall Streets’ expectations by $12 billion and $0.51 per share respectively.
The company also disclosed a cash pile of $204 billion which impressed investors, but raises the question of how to use it. Rising inflation concerns and low treasury yields make short term bonds and cash relatively unfavorable options, putting Apple in an opportunity cost dilemma.
For Apple, like other large tech companies, large acquisitions would be difficult to get through the regulatory process without drawing undesirable antitrust attention.
In an effort to address these concerns, Apple announced a 7% increase in quarterly dividends to $0.22 per share and the initiation of a $90 billion expansion of its share buyback plan. However, as the company continues to generate increasing sums of cash, it would still take years to whittle down its cash balance at this pace.
What do you think? Are these the best measures or could Apple put their cash to a better use?