Is Apple still a growth company? Tim Cook thinks so.

Any firm whose business generates significant positive cash flows or earnings, which increase at significantly faster rates than the overall economy. A growth company tends to have very profitable reinvestment opportunities for its own retained earnings. Thus, it typically pays little to no dividends to stockholders, opting instead to plow most or all of its profits back into its expanding business.

Apple (AAPL) doesn’t quite fit that model. Its earnings have been flat or down for the past five quarters and it’s started paying dividends because it doesn’t have enough profitable reinvestment opportunities for its tens of billions of retained earnings.

But Apple CEO Tim Cook, it turns out, has his own definition. Asked by the
Wall Street Journal
‘s Daisuke Wakabayashi to respond to the perception that Apple is no longer a growth company, he says:

Last year, we grew (revenue) by $14 billion to $15 billion. Yes, those percentages are smaller compared to a year earlier and two years earlier and so forth. But that doesn’t mean that you’re not a growth company. We were in hyper-growth, or whatever is above growth. We went from $65 billion to over $100 billion to $150 billion to $170 billion. These are historic, unprecedented numbers. I don’t know any companies adding growth at that level. So when you say $14 billion to $15 billion compared to those numbers, it’s clearly smaller and a smaller percentage, but, to put it in some context, that’s like adding three Fortune 500 companies in a year. I think that’s hard to say that’s not a growth company.

[The last quarter] was an interesting quarter in a lot of ways. It was our highest revenue ever. It was our best iPhone sales, best iPad sales and one of our best Mac quarters ever and this is in an environment where the PC industry is shrinking. And we grow by 19%, that’s pretty fantastic.

In other words, according to Cook, what matters is not rate of growth, but the absolute value. Hmm.