Is Apple about to shake that money tree again?

With Apple investors on the edge of their seats as the company prepares to announce its second-quarter earnings on Wednesday, the blogosphere is abuzz with talk of yet another cash disbursement from the deep-pocketed Cupertino tech giant.

Apple shares edged higher Monday as speculation grew that the company would once again return some of its multibillion-dollar war chest to investors in the form of dividends and share buybacks, just as it had done one year earlier. At that time, Apple announced it would bump up its cash-out to $100 billion by the end of 2015, and it had accomplished more than half of that goal by February.

As CNBC pointed out:

Tim Cook, Apple’s chief executive, promised to review its plans for its remaining $159 billion cash pile by the end of this month, after coming under pressure from activist investor Carl Icahn this year to return $50 billion more to shareholders.

Here’s the thinking: As Cook successfully fended off Icahn’s demands, he also suggested to investors that Apple would unveil new products this year after a long drought in that department. Yet with few observers actually expecting Apple to come up with a new TV or wearable “iWatch”  before June’s annual worldwide developer conference, it would make sense for Apple to dip into its cash hoard once again, just to keep everybody happy until a new killer product does come out.

According to press reports:

Bernstein Research has suggested Apple could authorise another $30 billion in buybacks, running until December 2015, and others agree some increase is likely. Analysts at Barclays said: “We believe revenue guidance for June may be a few billion below [expectations] given seasonal weakness in the iPhone and delays in customer purchases ahead of the iPhone 6 launch cycle in the fall . . . We look for Apple to compensate for the lack of imminent product catalysts with a higher buyback programme.”

So strap on your seatbelts, fanboys. Wednesday’s earnings conference call is just around the corner.

Credit: Reuters archives

Patrick May Patrick May (331 Posts)

With more than 30 years on the front line of daily American journalism, I'm currently a staff writer with the San Jose Mercury News, covering Apple and writing people-centric business stories from Silicon Valley.