May 12, 2021

FT: New Apple CFO could mean bigger investor payouts

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luca_maestriBy John Morgan From Moneynews

Apple’s new financial chief could represent a potential bonanza for investors who are hoping for a payoff from the company’s $160 billion cash hoard.

The Financial Times reported the appointment could raise hopes the Apple will boost its share buybacks and dividends, as new CFO Luca Maestri was described by one analyst as a “champion of shareholder return” in his past roles.

Italian-born Maestri is scheduled to take over from incumbent CFO Peter Oppenheimer in September. But already, speculation is growing around his selection for CEO Tim Cook’s evolving executive team.

Maestri joined Apple as its corporate controller only a year ago from Xerox, where he was CFO for two years, and previously held senior financial management roles at General Motors and Nokia Siemens Networks. He is also on the Goldman Sachs board.

Oppenheimer oversaw Apple’s $100 billion share repurchase and dividend plan in 2012, but Ben Reitzes, an analyst at Barclays, has expressed hope Maestri could increase that further, the Times reported.

Reitzes predicted Maestri is “likely to favor buybacks,” even as Apple girds for new product launches this year.

“Maestri will be assuming this role at an interesting time – when Apple is in the midst of launching more services and likely needs to convince investors that it has more consistent revenue streams in a commoditizing smartphone market,” Reitzes said in a note this week, according to the newspaper.

Activist investors, including billionaire Carl Icahn, have been campaigning in recent months for Apple to hoist the return of cash to shareholders.

Reuters reported that managing investors’ optimistic expectations could become harder as Apple, grappling with lower revenue growth and more aggressive competitors, expands further into lower-margin emerging markets such as China.

In recent years, Apple’s business has grown quickly beyond mostly hardware sales and into software and digital content.

“Managing Wall Street’s expectations became an exceptional challenge for Apple over the past couple of years,” said Morningstar analyst Brian Colello. “It’s clear what drives Apple’s growth. The issue is managing such a large, scrutinized company.”

“Now it’s become more of a leveling-off (of expectations). And that will continue,” Colello predicted.

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