Every announcement Apple makes is a big one, but Tuesday's quarterly results may be the company's most closely watched event in years. CEO Tim Cook won't be revealing a new iPhone, but it's likely he will shed some light on how the business plans to bring the $285 billion it's holding overseas back into America.
Ever since President Donald Trump revealed in December that he would reduce the tax hit on money repatriated into America — from a 35 percent tax rate to 15.5 percent on profits in cash and other liquid assets — all eyes have been on Apple, which has the biggest overseas bank account out of any S&P 500 company. It is Apple's No. 1 priority, according to senior vice president and CFO Luca Maestri, who noted that if the tax rate was lowered, it would give the company "flexibility around its capital return activities" last year at a Goldman Sachs investor conference.
That money, which is mostly held in short-term U.S. bonds and money market funds, was kept in Ireland for years, until an investigation by the European Union into whether the company failed to pay taxes caused it to move its holdings to Jersey, a small island off the coast of Normandy that rarely taxes corporations. (Apple owes Ireland $15.4 billion in unpaid taxes and has implemented a plan to make the payments but continues to appeal the EU decision.)
Investors have been waiting patiently since December's tax plan came out to find out exactly how the company plans to move its money from Europe into America and what it will do with those funds once they arrive back home.
"This is a very big deal to long-term investors, as cash has been hoarded by Apple on the balance sheet for the past decade," said Angelo Zino, a senior industry analyst with CFRA Research. "I think everyone is awaiting details on this call to better grasp its cash usage strategy."