Many financial analysts and Apple customers have been wondering lately about just what Apple would do with their massive $98 billion in liquid cash. With this morning’s call-in conference, we now know Apple’s plans for the money–and it’s good news for those who happen to own Apple stock.
Apple CEO Tim Cook announced this morning that Apple plans to award current shareholders with a quarterly dividend of $2.65 per share. $2.65 per share might not sound like much on the surface, but for those who own a lot of Apple shares, it’s a pretty nice number. For instance, an Apple shareholder who owns 1000 shares of Apple will receive a nice dividend of $2650.
Not only that, but Apple plans to use up to $10 billion of their cash reserve to repurchase stocks. They are doing this to help neutralize “the impact of dilution from future employee equity grants and employee stock purchase programs.” This should help to ensure the overall health and security of Apple stocks for years to come.
With such a large amount of money being used for these two plans, it might seem like Apple is spending all of their cash reserves. That’s definitely not the case here as Apple is spending a mere $45 billion of their cash reserve–so they’ve still got roughly $53 billion left over. Apple CFO Peter Oppenheimer said, “we anticipate utilizing approximately $45 billion of domestic cash in the first three years of our programs.”
According to Tim Cook, they’re maintaining a “war chest for strategic opportunities,” and holding “plenty of cash to run our business.” That war chest is expected to increase once profits from the recently released iPad and upcoming iPhone 5 are factored into the equation.
Shareholders can expect to receive their quarterly dividend sometime in the fourth quarter of 2012. The stock buyback program is set to commence at the start of the first quarter of 2013 (September 2012) and is expected to last roughly 3 years.