iPad maker will offer investors $2.65 per share beginning in July, as it looks to put $98 billion cash stock pile to work.
New iPad Teardown: Inside Apple's New Tablet
(click image for larger view and for slideshow)
With its coffers flush from sales of the iPad and other gadgets, Apple on Monday said it plans to issue a dividend starting this summer and begin a share buyback program.
The dividend will pay Apple investors $2.65 per share, beginning July 1, and the buyback will commence Sept. 30 and will occur over three years. Apple plans to buy back $10 billion in shares. The company is currently sitting on $97.6 billion in cash and investments, and had been under pressure to use its reserves more aggressively.
Apple shares were up 1.12%, to $592.13, on the news. The company last paid a dividend in 1995.
"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 these in the future," said Apple CEO Tim Cook.
"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," Cook said.
Former Apple CEO Steve Jobs, who died in October, was opposed to paying dividends, preferring instead to build Apple's cash reserves for investments and other business purposes.
Apple CFO Peter Oppenheimer said the company would use about $45 billion in domestic cash in the first three years of the programs. "We are extremely confident in our future and see tremendous opportunities ahead," said Oppenheimer.
With hits like the iPad, iPhone, and iPod, Apple has been a favorite of tech investors for the past several years. The company's share price has increased from about $95 five years ago, to the current price of almost $600. By contrast, rival Microsoft, which has fallen behind in mobile computing, has seen its share price stagnate over the same period--moving from about $28 to about $32.
Apple's latest cash cow is the new iPad, which features the high-resolution Retina Display, improved camera, a faster chipset, and support for Verizon and AT&T 4G networks. Apple launched the new iPad last week, and set sales records over the weekend, said Cook.
InformationWeek is conducting a survey on the state of private cloud use in the enterprise. Upon completion of our survey, you will be eligible to enter a drawing to receive an 32-GB Apple iPod Touch. Additionally, you will receive a discount code good for 25% off Flex and Conference passes to Interop Las Vegas 2012, to be held at the Mandalay Bay, May 6-10. Take our Public Cloud Survey now. Survey ends March 30.
How Enterprises Are Attacking the IT Security EnterpriseTo learn more about what organizations are doing to tackle attacks and threats we surveyed a group of 300 IT and infosec professionals to find out what their biggest IT security challenges are and what they're doing to defend against today's threats. Download the report to see what they're saying.
2017 State of IT ReportIn today's technology-driven world, "innovation" has become a basic expectation. IT leaders are tasked with making technical magic, improving customer experience, and boosting the bottom line -- yet often without any increase to the IT budget. How are organizations striking the balance between new initiatives and cost control? Download our report to learn about the biggest challenges and how savvy IT executives are overcoming them.