Tags: Warren | Buffett | Apple | Berkshire | Hathaway | Earnings

Buffett Doesn't Fret Over Apple, Touts 'Incredible Consumer Product'

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By    |   Friday, 05 May 2017 08:16 AM

Investment guru Warren Buffett hinted to CNBC that he’s not going to sell any of his Apple Inc. stock anytime soon and remains fully confident in the "incredible" technology the company offers consumers.

Buffett, the billionaire chairman of Berkshire Hathaway Inc., sold about a third of his company’s investment in computer-services giant IBM, CNBC reported.

Buffett told CNBC he understands why Apple's iPhone sales were weaker in the latest quarter and said he remains confident in the tech giant's stock.

"I don't own [Apple] because of what I think the earnings are going to be in the next three months or six months," Buffett told CNBC.

Apple reported a surprise fall in iPhone sales for its second quarter on Tuesday, indicating that customers may have held back purchases in anticipation of the 10th-anniversary edition of the company's most important product later this year, Reuters reported.

Apple sold 50.76 million iPhones in its fiscal second quarter ended April 1, down from 51.19 million a year earlier.

Buffett wasn't swayed by the dip in sales.

"It's very hard to figure out how much people delay their buying of iPhones because of the launch of a new one in six months," Buffett said.

"[But] a lot of people are waiting," he said, drawing an analogy to buying a new car. "If you knew a new car was coming out tomorrow … and you had to pay the same, roughly the same, I don't know what they are going to sell the new [iPhone] at but close to the same for the last year model, you are probably going to wait."

Buffett added he thinks the iPhone is an "incredible consumer product."

Under pressure from shareholders to hand over more of its $250 billion-plus hoard of cash and investments, Apple boosted its capital return program by $50 billion, increased its share repurchase authorization by $35 billion and raised its quarterly dividend by 10.5 percent.

"I love the fact that they've repurchased shares," he said. "If I like buying the stock myself, I like the company buying it. I obviously think that it's a good buy if you can buy your own stock. There is no company you should understand better than your own company."

Buffett wasn't dismayed that  Apple keeps most of its $256.8 billion cash pile outside the United States for tax reasons.

"My guess is that at some point or another that money will end up back in the United States, or most of it," he told CNBC.

For its part, Apple also said plans to create a $1 billion fund to invest in U.S. companies that perform advanced manufacturing, Chief Executive Officer Tim Cook said on Wednesday, the iPhone maker's latest effort to show how it is creating U.S. jobs.

The Cupertino, California company will announce the fund's first investment later in May, Reuters reported, citing CNBC.

Cook also said Apple plans to fund programs that could include teaching people how to write computer code to create apps, and will release more details about the effort this summer.

(Newsmax wires services Bloomberg and Reuters contributed to this report).

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Investment guru Warren Buffett hinted to CNBC that he’s not going to sell any of his Apple Inc. stock anytime soon and remains fully confident in the "incredible" technology the company offers consumers.
Warren, Buffett, Apple, Berkshire, Hathaway, Earnings
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2017-16-05
Friday, 05 May 2017 08:16 AM
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