Apple unlocks more cash for investors as profit slides

Tue Apr 23, 2013 7:35pm EDT
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By Poornima Gupta

SAN FRANCISCO (Reuters) - Apple Inc on Tuesday bowed to investors' demands to share more of its $145 billion cash pile, while posting its first quarterly profit decline in more than a decade.

The new expanded capital plan includes issuing debt for the first time to fund $100 billion in share repurchases and higher dividends until the end of 2015. The plan, doubled from a previous one set last year, makes Apple the largest dividend-paying company in the world.

The company's shares, which have declined in recent weeks, rose sharply but retreated after Chief Executive Tim Cook told analysts on a conference call that "some really great stuff" was coming in the fall and 2014. That suggested Apple would have no new products in the market for the next few months.

Apple relies heavily on new product launches to drive revenue growth. It recently refreshed its offerings in October, unveiling the 7.9-inch iPad mini and an updated full-size iPad.

The new capital plan came as Apple's fiscal second quarter profit slid 18 percent. While revenue rose 11 percent, it was a sharp slowdown from 2012 and in previous years.

Cook also acknowledged that Apple's once stratospheric growth had tempered but stressed that the company's position remained strong.

"Though we've achieved a credible scale and financial success, we acknowledge that our growth rate has slowed and our margins have decreased from the exceptionally high level we experienced in 2012," he said in a rare admission.

In the last couple of years, Apple has seen a slowdown in demand for iPhones and iPads ahead of an expected launch, which analysts said would hurt its profit for the current quarter.   Continued...

A visitor tries out an iPhone at an Apple store in Beijing April 2, 2013. REUTERS/Kim Kyung-Hoon