Apple plans to reduce its net cash balance to “approximately zero” following a new US law that will allow it to repatriate its overseas profits at a lower tax rate, the iPhone maker’s finance chief told the FT in an interview. 

 The move means shareholders might expect to see a significant increase in dividend payouts or share buybacks as well as a potentially large step-up in Apple’s acquisition plans. Apple had $163bn in cash net of debt at the end of the December quarter, it reported on Thursday. Last month, it said it expected to pay $38bn to the US government on its offshore cash pile, as a result of the tax reform. 

 Luca Maestri deferred a more detailed discussion of its capital allocation plans until April, when it typically announces increases dividends and share buybacks. But following December’s tax changes, he said, “we now have an opportunity to target a more optimal capital structure for our company.” “Our target over time is to take that $163bn down to approximately zero,” Mr Maestri said, without providing a more specific timeframe. “All that cash will be deployed for capital allocation.” That could include M&A, dividends and buybacks, he said. 

The comments came as Apple reported record revenues and profits but slower iPhone sales in December than analysts had expected.

Source: ft