Apple hoards 10% of US corporate cash

The technology sector is the most flush of all industries, with the top 4 kings holding a collective $329 billion.

By MSN Money Partner Oct 2, 2013 2:47PM

Apple CEO Tim Cook speaks in San Francisco, Calif., on September 12, 2012 (© Eric Risberg/AP)CNBCBy Ansuya Harjani

 

Apple's (AAPL) $147 billion cash pile accounts for 10 percent of the overall cash held by U.S. corporates, according to Moody's Investors Service, up from 9.5 percent at the end of 2012.

 

U.S. corporates held a total of $1.48 trillion in cash as of June 30, up 2 percent from the previous record $1.45 trillion at the end of 2012. The survey covers 1,067 non-financial companies based in the U.S. and rated by Moody's.

 

The technology sector is the most cash-flush of all industries, with the top four cash kings -- Apple, Microsoft (MSFT), Google (GOOG), Cisco (CSCO) -- holding a collective $329 billion.

 

Yet Apple's cash hoard is almost double that of Microsoft, for example, which has $77 billion. (Microsoft owns and publishes Top Stocks, an MSN Money site.)

 

Apple has been active in returning cash to shareholders over the past 18 months. In April, the company pledged to spend $60 billion in buying back its stock by the end of 2015. By June, it had repurchased $16 billion worth of its stock.

 

However, investors including billionaire activist investor Carl Icahn believe the company should do more. Icahn revealed on Tuesday that he had dinner with Apple CEO Tim Cook and urged him to increase the company's stock buyback program.

 

Icahn said in August that if Apple would issue a larger share buyback, the stock could be worth as much as $700 a share. Apple shares traded at $487.96 on Tuesday.

 

Cash not confined to techs

After the technology sector, the health care and pharmaceutical industry is the next most cash-flush sector, according to Moody's. Pfizer (PFE), for example, is sitting on a $50 billion cash pile.

 

Automakers are also among the most cash-rich, with Ford Motor (F) and General Motors (TM) holding $27.7 billion and $26 billion, respectively.

 

More from CNBC

102Comments
Oct 2, 2013 4:06PM
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"I understand these corporations face huge tax bills if they bring the money back into the U.S.

Why isn't Washington negotiating a fairer tax rate to incentivize them?"

 

KMick, because the last time that companies said if the tax rate got lowered the companies would bring the money back to the US and create jobs, all the companies did was increase the payout of dividends to stockholders, buyback more of the companies stock, give the CEO, top executives and board of directors increases in pay, cut workers jobs, and ship more jobs overseas. So, yeah, the companies did create jobs, EVERYWHERE ELSE BUT IN THE U.S.!

Oct 2, 2013 3:46PM
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Guessing you won't see all of the liberals spouting off about Apple and its cash situation.  If this were an oil company every one of the mental midgets on the left would be howling.  Instead they look down at their I-Phones and read the news and say "ho-hum, much ado about nothing".  Hypocrites!
Oct 2, 2013 3:47PM
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The article doesn't mention how much of that cash is residing abroad.

 

I understand these corporations face huge tax bills if they bring the money back into the U.S.

Why isn't Washington negotiating a fairer tax rate to incentivize them?

Oct 2, 2013 4:54PM
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They are getting away without paying their fair share. New law going out to not give these companies an American status if they do not have at least 80% US citizens employed. If they fail to do so they will be considered a foreign company thus US laws will not protect them. Interesting new concept.
Oct 2, 2013 3:52PM
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Everyone speaks of the evil oil companies. Not even close to being on the top. Obama just noted yesterday speaking of signing up for healthcare and the problems are similar to when Apple launches a product and their are glitches we don't want them to stop launching products. My point is that many speak nastily about the oil companies but nobody seems to take this stance with Apple or Microsoft. Exxon paid 48 billion last year in taxes and made 51 billion. Apple made 54 billion and paid 16 billion in taxes. Want the tax cheats. Go after these tech companies.
Oct 2, 2013 4:22PM
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Millionaires and Billionaires investing in million, billion and trillion dollar companies. What do these big investors like Icahn actually do to support these companies success other than dump money into a stock and pressure them to pay a bigger dividend and buyback shares? As far as I'm concerned, Apple should just buyback every last stock and go private along with all these big companies like Microsoft and Walmart and get back to grass roots. Why? Apple doesn't need Nasdaq, Dow Jones or Icahn, neither does Walmart or Microsoft because they are Billion dollar corporations with a good handle on providing goods and services people want.
Oct 2, 2013 10:18PM
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Perspective, 

   History proves that even the mighty Pharaohs of ancient Egypt who hoarded their great wealth within enormous pyramids embarked upon a foolish and temporal plan. Money is worthless unless it is spent or invested, and to that end Apple has myopic vision ... akin to that of Mr. Cook. At the very least, and at a significant write-off, they could invest some of their horde of cash into corporate sponsored technical schools around the country where aspiring students can become the next generation of computer scientists, engineers and software/ new product developers. The money apparently is pouring in faster than they can count it...something inventive and productive needs to be done with just a portion of it. Simply invest in talented people, and it will result in a long and prosperous future for the company and the general public. Peace to all ~

Oct 2, 2013 4:10PM
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I have a few billion in cash in between my mattress and box springs.  It gives me a headache when I count it all.  I'm looking for a girlfriend to take over that duty.
Oct 2, 2013 9:17PM
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I find the corporate selfishness and greed in America appalling! Apple could easily manufacture its products in the US and pay into the US system that made its success possible in the first place! But no they and most all of the other gready corporate scum bags do everything possible to cheat our nation out of the jobs and wealth we all deserve! After all it is we the people who make apple wealthy...we buy there Chinese manufactured over priced crap and make them wealthy! Its trickle up economics stupid.. the way it really works and always has! we need to stop buying everything made here we can find Googles Motorola phones are now engineered and manufactured here in the states like they used to be and they are exellent ny any standard!
Oct 2, 2013 11:56PM
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Just think.  If the U.S. government could sieze all the S&P 500 cash, they could run the entire federal government for 4 months.....and the entire world's economies would crash.
Oct 2, 2013 6:08PM
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Clearly, our nations best are not in the business of politics.   We need to figure out how to attract our business leaders into politics and get the rank & file American voters to support them. Somehow those voters need to figure out that empty promises of receiving free money from others is not the solution to unemployment and higher paying jobs - and a better life.  Obviously after 5 years its clear a community activist is not going to supply the solutions or earn the necessary respect to lead us out of recession -  he is an inexperienced amateur totally out of his league who has divided this country.  The gov't shutdown is nothing more than a reflection of the division created under Obama.  Our gov't will come together when we have a leader that both sides can respect.

Oct 2, 2013 7:06PM
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Carl Icahn is Insane to have the nerve to tell Apple to engage in some ridiculous $150Billion Dollar Stock Buyback. The Guy clearly has a God Complex. Apple has done fine without his BS comments. They are literally printing money as the Keeping Up with the Jones Crowds buy their phones, regardless of Party. If I were Tim Cook, I would tell Carl to take a Long Walk off a short Pier.
Oct 3, 2013 9:18AM
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What no ones is telling you, is that Apple could be the next Black Berry. They were almost bankrupt once before, it could happen again. Here lies the problem. Apple had a better operating system then Microsoft but Apple would only provide it with their own hardware, While Microsoft sold it to every PC maker and the rest is history. Now Apple is doing the exact same thing with their cells phones and iPads.  They will only offer the Apple operating system on their equipment while Google is giving it to anyone. So now within just a few short years, Google has almost 75% of the global smart phone operating system business, while apple is about 24%. They better keep a lot of cash so they don't have to borrow it from Microsoft again or maybe even Google. If your a long term investor stay away from Apple. If you want short term goals, buy now and then cash out when it gets near $700 because the free fall could be deadly.
Oct 3, 2013 10:18AM
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BIG Companies need to have huge cash reserves to deal with market fluctuations and avoid layoffs.

R&D is very expensive, and so is borrowing money, Having money prevents you from having to borrow it.  Also if you want to avoid losing control of your publicly traded company it might be a good idea to have some extra cash reserves in order to buy back your own stock

 

there are some people on here that whine about everything, but have no idea what it takes to actually run a business.

I will predict that every thumbs down this post receives is from somebody with there head up there own a$$

Oct 2, 2013 5:40PM
Oct 3, 2013 11:26AM
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Those companies which are cash rich and no or little debt should be running the U.S. Government. They are to be praised and admired but will be vilified and reviled by the tax and spend crowd. Should they be penalized by the tax man they might consider moving elsewhere, people should not penalized for success, in spite of it being the new American way.
Oct 3, 2013 12:08PM
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The article failed to mention that GE has $132 billion in cash.
Oct 3, 2013 12:04AM
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Good for Apple! It's always smart to SAVE, not HOARD, money. Why do you write this article like SAVING money is a bad thing? It's THEIR money they can do what they want to with it! They EARNED it, it belongs to them, and not to the government to dole out to lazy, good for nothing, welfare collecting, jackasses!

Dr. E

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