The comments came when Goldman Sachs analyst Bill Shope asked Mr. Cook about its cash holdings, which stood at more than US$97 billion at the end of the December quarter. He said that Apple had been sparing in its use of that money and noted that there has been a lot of talk about an AAPL dividend, asking point blank, “Should we expect a dividend?”
Mr. Cook argued that his company has not been sparing with its use of cash and said that Apple has spent billions of dollars on its supply chain, developing its retail presence, and building up its data center capabilities. Still, he acknowledged that, “Yes, we still have a lot [of cash],” a line that elicited laughter from the audience.
“I’d say we’re judicious, we’re deliberate,” he said. “We spend our money like it’s our last penny. I think shareholders want us to do that. I don’t think they want us to act like we’re rich.”
He also repeated a line he originally ventured in his first conference call with analysts as CEO of Apple in late 2011, saying, “I said since becoming CEO that I’m not religious about this. I’m not religious about holding it, or not holding it.”
Mr. Cook then went on to say, “We’re in very active discussions in the board about what we’ll do with it, but I think people want us to be deliberate.”
Mr. Shope reacted to this by noting that the comment about Apple’s board of directors being in “very active discussions” about what to do with its money helped the audience understand. This was oblique acknowledgment of the reality that tech execs, especially Apple’s, often speak in code to convey a point without actually saying it.
Coming in the wake of the direct question, “Will we see a dividend?” a fair reading of Mr. Cook’s comment and Mr. Shope’s reaction is that the board has been discussing a dividend and is seriously considering it. It’s a far cry from a commitment, and we will be watching what analysts make of the comments in the next few days.
Mr. Cook also added another comment that could add even more color on the possibility of an AAPL dividend when he said, “We have more cash than we need to run the business on a daily basis, so we’re actively discussing it. I only ask for a bit of patience so we can do it in a very deliberate way and do the best for the shareholders.”
This is likely to be the big takeaway line for Wall Street from the speech.
*In the interest of full disclosure, the author holds a tiny, almost insignificant share in AAPL stock that was not an influence in the creation of this article.