If a company earns $1 Million in net profit (let's say all cash, which is not entirely realistic), it can do one of three things with it:
- Invest it back in the company (by buying more assets to generate future profits or paying off debt to reduce interest expense)
- Return it to shareholders (dividends, stock buyback)
- Do nothing (keep it as cash)
None of those change the fact that it is still "profit" - they all just affect the balance sheet, not the income statement.
To be fair to Apple, since a significant amount of its profit was earned in other countries (where it was not taxed by the US), it would pay a significant amount in tax by bringing it back to the US to invest it or pay dividends. They are betting that at some point, the US will change the rules to make it more favorable to "repatriate" the money and give them a significant amount of tax savings.
