- S&P Global Ratings warns investors that the U.S. tax overhaul could harm the tech sector and that it might “never look the same again.”
- S&P believes “the overall industry credit profile will weaken over time, largely because of the potential for more aggressive financial policies in response to greater access to overseas cash.”
- S&P notes Apple’s (AAPL -0.6%) plans to go from $163B in cash to becoming net-cash neutral and says this could happen with other companies.
- Other tech companies with large stashes of overseas cash: Alphabet (GOOGL -2.6%), Cisco (CSCO -2.4%), and Qualcomm (QCOM -3%).
- S&P also calls out companies with almost as much debt as overseas cash. If those companies repatriated and passed the cash on to shareholders while holding on to the debt, the action would prove harmful to the company’s rating.
- Companies with overseas cash and debt nearly in balance: Oracle (ORCL -2.7%), Hewlett Packard Enterprise (HPE -1.9%), Western Digital (WDC -3%), and Intel (INTC -3.9%).
- Previously: Moody's not too concerned with Apple's "cash neutral" policy (Feb. 2)
- Now read: Broadcom (NASDAQ:AVGO)'s Attempt At Bargain Shopping
Original article