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Tuesday, March 20, 2012

Apple announces stock buyback

By Pat May

San Jose Mercury News

SAN JOSE, Calif. – The world’s most valuable publicly traded company has finally found something to do with its hoard of cash.

In a conference call Monday, Apple Inc. CEO Tim Cook announced that the Cupertino, Calif., company would initiate a dividend and share repurchase program beginning later this year, using $45 billion of its nearly $100 billion cash on hand.

Subject to the board’s approval, Cook said the company plans to offer a quarterly dividend of $2.65 per share sometime in its fiscal fourth quarter, which begins July 1.

“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,” Cook said during an unusual conference call with analysts early Monday. “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.”

Apple also said its board has authorized a $10 billion share repurchase program for its fiscal year 2013, which begins Sept. 30 of this year. Apple said it expected the move to take place in three years and said its main goal was “neutralizing the impact of dilution from future employee equity grants and employee stock purchase programs.”

Apple has been increasingly under pressure by investors to give back some of the $100 billion in cash it had accumulated in the past few years thanks to red-hot iPhone and iPad sales. In January, Apple unveiled another stellar earnings report, its first of 2012, with a breathtaking 118 percent jump in profit.