Update: Apple Announces Dividend for Q4, $10B Share Repurchase for 2013; Closes Above $600
March 19, 2012 5:12 PM
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Apple plans to use $45 billion of its cash reserves over the next three years
It's no secret that Apple is a cash machine. The company rakes in billions of dollars thanks to a legion of loyal fans that lineup hours in advance to purchase its latest and greatest phones and
. The company has also seen a surge in its traditional PC business thanks to strong sales of its MacBook Pro/MacBook Air lineup of notebooks and iMac all-in-one desktop computers.
In late January, Apple reported profit of $13 billion on revenues of $46 billion for
fiscal Q1 2012
. The company saw its
stock price cross the $500/share threshold
in early February, making it worth more than Microsoft and Google combined. More recently,
has danced with the $600/share mark. In addition, Apple has
roughly $100 billion in cash/securities on hand
– a figure that CEO Tim Cook said is “more than we need to run the company.”
Apple CEO Tim Cook [Source: David Paul Morris/Bloomberg]
This morning, the company announced a $10 billion stock buyback program that will start in fiscal 2013. The buyback will take place over the course of three years with the primary goal being to "[neutralize] the impact of dilution from future employee equity grants and employee stock purchase programs."
A more immediate action being taking place is a quarterly dividend starting in fiscal Q4 2012. The quarterly dividend will equal $2.65/share.
“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," said Cook.
According to CFO Peter Oppenheimer, these programs will burn through $45 billion of Apple's cash reserves over the next three years.
Updated @ 5:12pm
AAPL just closed
for the first time in its history.
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RE: Investors win!
3/19/2012 10:35:47 AM
Building a vast cash mountain was done to make Apple almost invulnerable. It can fuck up, although it shows no sign of doing so, and recover. It can afford to gamble, both the iPhone and the iPad were a big gamble and a leap into an unknown product territory. It can afford to wait until it get things right. It can make careful strategic purchases and it can invest in it's supply chain and retail network. It can even, if it was ever seriously pressed in the market place, reduce it's margins and compete more forcefully on price.
Big acquisitions rarely go well so are best avoided unless there is a special strategic case.
Apple's success is based on keeping it simple and concentrating on doing just few things and doing them very well. Saying 'no' is as important as saying 'yes'.
Personally pleased about the dividend though, a nice spot of cash once a quarter will be very appreciated.
"We shipped it on Saturday. Then on Sunday, we rested." -- Steve Jobs on the iPad launch
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