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Print 25 comment(s) - last by TakinYourPoint.. on Mar 20 at 5:32 PM

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 tablets. 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, AAPL 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 above $600/share for the first time in its history. 

Source: Apple



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RE: Investors win!
By Solandri on 3/19/2012 7:10:37 PM , Rating: 2
quote:
The man brought a company on its knees to #1 in market cap and your complaining?

Maybe we need to hire more mentally unstable CEOs.

Just because someone is successful doesn't mean they're perfect. It's possible to respect and even like what a person has accomplished, while still offering fair and legitimate criticism of some of the things he did wrong.

I'd agree calling him mentally ill was an ad hominem. But not paying dividends is immoral IMHO. The first shareholders originally invested capital into the company - capital which was critical to its early growth. In exchange for that investment, they were given partial ownership and hence a share of the profits - dividends. Current shareholders have bought that right from the original shareholders. IMHO refusing to pay dividends would be like me declaring to the bank that I'm not going to pay interest on my mortgage anymore.

If you don't want to pay dividends, do the right thing and buy back all your stock. That's essentially paying back all the original investors (or people who bought rights to it) for their original "loan".


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