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Apple announces $10b share buyback starting in fiscal 2013, $2.65 dividend for Q4

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apple store 5th ave
apple store 5th ave

Ahead of a conference call this morning, Apple has announced a pair of initiatives for its massive stockpile of cash totaling approximately $100 billion: a stock buyback beginning in fiscal 2013 (which begins on September 30th of this year) along with a per-share dividend of $2.65 to start sometime in fiscal Q4, which starts on July 1st. The buyback is expected to run over three years.

CEO Tim Cook notes that the company is already investing heavily in the fundamentals, saying:

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. 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.

All told, Apple expects to spend $45 billion on the programs — a big number, yes, but it's put in perspective when you consider that it made over $13 billion in profit in the last quarter alone. Notably, CFO Peter Oppenheimer said that Cook has requested that none of his unvested RSUs (restricted stock units) participate in the dividend payout. He also said that the total payout was influenced partially by Apple's desire to avoid the tax issues involved with repatriating the cash that it holds internationally.

On the call, Cook noted that he sees huge upside for Apple in the future, saying that the company still holds less than 6 percent of the global PC market — a market that still ships 350 million units per year — while also giving props to the iPhone and iPad business that continue to grow by leaps and bounds. "We have thought very carefully and deeply about our cash balance... these decisions will not close any doors for us."

Regarding the possibility of a split for a stock that's now hovering around $600, Tim said: "That is something we have looked at while looking at this cash question... there's very little support that it helps the stock. However, we are in a unique position at a unique point in time so that this is something we continue to look at. If we reached a decision that it was in the best interest of Apple and its shareholders, then we would do it."

Addressing a question about future products, Cook obviously wouldn't give any hints, saying only that "our pipeline is full of stuff."