Apple to Offer Dividend and Buybacks

Posted by at 11:19 am on March 19, 2012

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.

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