Update: Apple Announces Dividend for Q4, $10B Share Repurchase for 2013; Closes Above $600
March 19, 2012 5:12 PM
comment(s) - last by
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.
This article is over a month old, voting and posting comments is disabled
RE: Investors win!
3/19/2012 5:09:48 PM
I agree 2% doesn't make me want to buy any more, but it's also doesn't make me want to hold any less. I’ve owned Apple since soon after they said the iPod would support Windows PC’s. Had they had a 2% dividend which I reinvested, that 2% would have accumulated quite nicely for me. Independent of the dividend I have considered selling some of my Apple but I’m not willing to pull the trigger yet.
I'm not sure what companies you want them to buy, they have bought many smaller companies over the years and continue to, but I’m not sure what large companies are a good fit. Sure they could by a network, record label or cable company, but what kind of return are they going to provide and do you run the risk of limited content from rivals on iTunes?
RE: Investors win!
3/20/2012 10:40:54 AM
I'm not sure what companies you want them to buy
In the past there were numerous companies that I thought they should buy at the time, however, those opportunities are now gone. Instead, I stand by my assertion that Apple should have gotten into financing in order to profit off of the loan process that helps carriers put Apple devices into customers hands. Other tech firms are already going this route Rogers Communications being the most unconventional is going to do everything from corporate finance to credit cards.
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