iCahn Alert: Apple’s Cash Hoard Hits New Record

Carl Icahn, Herbalife, Netflix

If billionaire activist investor Carl Icahn wasn’t already picturing himself doing a Scrooge-McDuck swan dive into Apple’s (NASDAQ:AAPL) massive cash pile, he definitely is now. The world’s largest company by market capitalization reported its latest round of earnings after Monday’s closing bell. Apple beat expectations on the top and bottom line and grew its cash hoard to a new all time record.

For the company’s fiscal 2014 first quarter, Apple posted a net profit of $13.1 billion ($14.50 per diluted share), compared to $13.1 billion ($13.81 per diluted share) a year earlier. Revenue increased from $54.5 billion to $57.6 billion over the same period. While growth and innovation remain a concern among some analysts, Apple’s results topped Wall Street’s earnings estimate of $14.09 per share on revenue of $57.5 billion.

Apple sold 51 million iPhones in the quarter compared to 47.8 million iPhones in the year-ago quarter. In fact, it was the best quarter for iPhones in Apple’s history, but still below expectations of about 55 million by analysts. Apple sold 26 million iPads — also a fresh record — and 4.8 million Macs.

Through all the Icahn-related drama, Apple grew its massive cash hoard to a new record-breaking level. Taking the total of Apple’s cash and cash equivalents, short-term marketable securities, and long-term marketable securities, the company’s cash position grew to $158.8 billion, up $12 billion from the prior quarter. In comparison, Apple held a total cash position of $137.1 billion a year earlier. As the chart below from Zero Hedge shows, the fact that Apple is increasing its cash position is just business as usual.

Screen Shot 2014-01-27 at 4.32.56 PM

Apple’s total cash position is bigger than the entire market capitalization of Hewlett-Packard (NYSE:HPQ), Netflix (NASDAQ:NFLX), Twitter (NYSE:TWTR), Best Buy (NYSE:BBY), BlackBerry (NASDAQ:BBRY), and Pandora (NYSE:P) combined. Apple has returned a portion of the cash back to investors, but some want the tech giant to do more.

“We generated $22.7 billion in cash flow from operations and returned an additional $7.7 billion in cash to shareholders through dividends and share repurchases during the December quarter, bringing cumulative payments under our capital return program to over $43 billion,” explained Peter Oppenheimer, Apple’s CFO, in a press release.

Last year, Apple announced the biggest capital return program in market history. In April, Apple’s Board of Directors approved a plan to return $100 billion by the end of 2015, representing a $55 billion increase from the original plan announced in 2012. It raised its buyback program from $10 billion to $60 billion and hiked its quarterly dividend 15 percent from $2.65 to $3.05 per share. The move marked a bottom for shares and placed more cash in the pockets of shareholders.

Icahn revealed in a tweet last week that he purchased more shares of Apple and now holds a position around $3.6 billion. He also continued his crusade to convince Apple to return more cash to shareholders in an open letter to investors that was filed with the Securities and Exchange Commission. Icahn requests that, “That Apple commit to completing not less than $50 billion of share repurchases during Apple’s fiscal year ending September 27, 2014.”

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