U.S. Companies' Cash Piles Set to Shrink in 2019 -- Moody's
November 14 2019 - 7:45PM
Dow Jones News
U.S. companies outside the financial sector are expected to hold
less cash this year than in 2018 as they repay debt and return cash
to shareholders, according to Moody's Investors Service.
Cash holdings are set to decrease to $1.56 trillion at the end
of 2019, compared with $1.69 trillion in 2018, it said.
Technology companies remain the biggest holders of cash. Apple
Inc., Alphabet Inc., Amazon.com Inc., Cisco Systems Inc., Facebook
Inc., Oracle Corp. and Microsoft Corp. are expected to hold a
combined $638 billion in cash through 2019, a decline of 1% for the
seven companies compared with the prior year, Moody's said.
Revenue, cash flow from operations, capital spending and
investments for research and development are set to rise at those
technology companies, while share buybacks and debt are expected to
fall, according to Richard Lane, a Moody's senior vice
president.
Cash allocation policies at those technology firms aren't
representative of what other large U.S. companies are planning to
do, Mr. Lane said. "These companies do not alter their strategy
because of tax reform or the economic outlook."
Other firms might adjust their strategy to hoard cash again in
the face of heightened uncertainty because of trade tensions,
Britain's planned exit from the European Union and political
unrest, Mr. Lane said.
Write to Nina Trentmann at Nina.Trentmann@wsj.com
(END) Dow Jones Newswires
November 14, 2019 19:30 ET (00:30 GMT)
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