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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 Iaiken on 3/20/2012 10:34:48 AM , Rating: 2
quote:
I bought 300 shares of Apple back in 2008 at $70 a share.


For you to make that purchase and subsequent capital gain other investors took a $30,000 total soaking. This is what I am talking about with regard to volatility. While it's nice that you have made money off them, many other people have eaten 10-50% losses on the stock since 2008.

quote:
I think the stock will begin to slide.


Bingo! Now you're on board with the way I see this decision to pay out a pathetic dividend. If you go back to my original post you'll start to see that I was saying that this was a bad idea and that there were tons of better things to do with that cash.


“So far we have not seen a single Android device that does not infringe on our patents." -- Microsoft General Counsel Brad Smith














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