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Apple climbs in Fortune 500 ranking to #3, overtaking Chevron and Berkshire Hathaway


Apple has climbed two places in this year’s Fortune 500 list, a ranking of U.S. companies by revenue. Apple moved from 5th place last year to 3rd this, overtaking both Chevron and new AAPL investor Berkshire Hathaway, though still sitting behind Walmart and Exxon Mobil.

Reading Fortune‘s write-up of Apple, however, you might be forgiven for thinking it had fallen in the ranking rather than climbed …


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Senate proposal could allow Apple to repatriate $178B foreign cash, but unlikely to pass


If you were confused by Apple having to repeatedly borrow money to fund stock buybacks while sitting on huge cash reserves ($178B as of last quarter), the reason is that the bulk of that cash is held overseas. Apple can’t bring it back into the USA without paying 35% tax on it, so it’s far cheaper to borrow.

Bloomberg reports that Senators Rand Paul (R) and Barbara Boxer (D) are proposing a bill that would allow companies like Apple to repatriate foreign-held cash while paying just 6.5% tax rather than 35%. The tax raised by this would, they propose, go to the Highway Trust Fund to pay for infrastructure programs across the USA.

It wouldn’t help Apple’s stock buybacks, however: companies taking advantage of the scheme would only be allowed to spend the money on investment, such as R&D and acquisitions. It specifically could not be spent on stock buybacks or executive compensation.

The chances of the bill making it into law seem slim. Business Insider notes that a previous repatriation program that did make it onto the statute books appeared to backfire, a government study finding out that the companies who took advantage of it actually cut both R&D spending and jobs.

The Joint Committee on Taxation also concluded that a similar proposal put forward last year would actually end up costing the government money in the long-term, and Senate Finance Committee head Orrin Hatch said the latest proposal wouldn’t increase government revenues and was “bad policy.”

Part of the reason for that is that if companies get one tax holiday, they will assume there will be others in future. It thus incentivizes them to push more profits overseas in the belief that they can bring them back next time around.

With Apple having just announced world record quarterly earnings, and having been investigated for taking advantage of legal tax avoidance schemes overseas, the public mood may also not be too supportive of the company getting a tax break in its home country.

AAPL will announce record quarter, predict analysts, with earnings up 11.9%


Analysts are predicting that Apple (AAPL) will announce record sales and earnings in today’s fiscal Q4 (calendar Q3) earnings call, reports Fortune.

I’ve got the collected fiscal Q4 estimates of 33 Apple analysts — 21 professionals and 12 amateurs. They are all to a man (and one woman) predicting record Q4 sales and earnings (up 7.1% and 11.9%, respectively).

The analysts also expect earnings per share to be up 12% year-on-year, to $1.32 … 


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Apple posts reminder & streaming link for Oct 20 Q4 earnings call


If you’d like to listen in to Apple’s Q4 earnings call at 2pm PT on Monday, Apple has now posted the link for the live audio stream: It will also remain available for replay for around two weeks afterwards.

The webcast is available on any iPhone, iPad or iPod touch running iOS 4.2 or above, as well as any Mac running OS X 10.6.8 or later. Windows users can also listen in so long as they are running QuickTime 7 or later.

Apple’s revenue guidance is quite broad at $37-40B, with a gross margin of 37-38%. We’re unlikely to learn anything specific about iPhone 6/Plus sales, as Apple generally doesn’t break down the numbers by model, but the overall sales figures will give us a good steer.

Better-than-predicted results, and shifts from other tech stocks, lifts AAPL toward $600


Investors seem to have taken heed of analyst ratings in response to the higher-than-predicted earnings Apple reported last week, the share price climbing from $524.75 before the company released its financials to approaching $600 at the time of writing.

Fortune suggests Apple’s results isn’t the only factor at play, with investors perhaps also following Greenlight Capital’s lead in moving out of other tech stock with particularly high price to earnings ratios – the measure of how a share price relates to its earnings. The higher the P/E ratio, the more over-valued it looks according to traditional measures … 


Over half analysts surveyed expect AAPL to beat its own high-end guidance today


Update: The analysts were right to be optimistic, but not optimistic enough

As we wait for Apple to announce its Q4 results in this afternoon’s earnings call, more than half of the analysts included in Fortune’s survey expect the company to beat its high-end guidance of $37B. The average is driven up by the amateurs, who come in at $37.38B, while the professionals expect just a touch under the top end at $36.95B.

Predictions on both revenues and earnings do vary markedly, however. While the consensus view is that year-on-year revenues will be up 3 percent and earnings down 6 percent, even among the professionals the earnings estimates span a 15 percent range.

Top: FBN’s Shelby Seyrafi: $39.18 billion (up 9% year over year)
Bottom: Cantor Fitzgerald’s Brian White: $34.57 billion (down 4%)

Apple beating its own guidance wouldn’t have been remarkable in the days when Apple gave absurdly pessimistic guidance and then blew it away, but would be impressive since Cook started offering realistic ranges …