Apple confirms quarterly dividend, stock buybacks
updated 08:45 am EDT, Mon March 19, 2012
Apple to offer dividend and buybacks
Apple ahead of its live event call confirmed the plans for its $97.6 billion cash balance. It now intends to start quarterly dividends of $2.65 per share starting with its summer quarter, which starts July 1. Along with the move, it plans to buy back $10 billion in shares over the course of three years, starting with its fiscal 2013 year beginning on September 30.
CEO Tim Cook promised that the company could both make its usual heavy investments and offer the dividend.
"We have used some of our cash to make great investments in our business through increased research and development, acquisitions, new retail store openings, strategic prepayments and capital expenditures in our supply chain, and building out our infrastructure," he said. "You’ll see more of all of these in the future. Even with these investments, we can maintain a war chest for strategic opportunities and have plenty of cash to run our business. So we are going to initiate a dividend and share repurchase program."
CFO Peter Oppenheimer also preemptively struck out at complaints of withholding cash abroad and said $45 billion would be spent domestically in the first three years. "We are extremely confident in our future and see tremendous opportunities ahead," he said.
The dividend is Apple's first since 1995 and reflects a change in attitude towards cash under newer leadership. The late Steve Jobs is believed to have been averse to dividends as he preferred to build up a cash reserve to buffer against economic conditions, lost market share, or supplier emergencies. Concerns started to mount as the company's cash on hand reached well into the tens of billions of dollars.
Fresh-Faced Recruit
Joined: Nov 2010
Maybe this can work...
I've been very pleased with Apple over the years holding onto its cash and showing the endless backseat drivers asking for stock buy-backs and dividends to forget it. They have the wrong company.
But now that their cash has reached $100Billion, I could see that any more might start to create many problems in all sorts of ways for them. And I'm comforted that their plan is currently set at $45 Billion over 3 years. If there aren't other costs that the articles haven't mentioned, then this means that their nest egg will still continue to grow, but thankfully a lot slower. Probably at the rate that they currently spend from it for corporate purchases.
So they will still be buying strategically when they need to, they will keep $100 billion in the bank, leaving them with all the options they would ever want, and they also can give back to stockholders. Win/Win/Win. OK. I can accept it.