As we reported, the conference regarding plan for Apple dividends and repurchasing of shares did take place on the morning of 19 March 2012.
Apple announced plans to buy back some of the company’s shares and start paying a dividend to shareholders.
Apple will begin paying a quarterly dividend of $2.65 per share starting in July. The dividend will be equal to a yield of 1.8% measured against the stock’s closing price. This may not be a massive number, but for those who hold a substantial number of Apple shares the payout could be profitable. The dividend will cost Apple around $10 billion this year, but the company generated close to $16 billion in cash during 2012’s first fiscal quarter. Stern Agee and Leach inc. analyst Shaw Wu predicted that Apple will generate $75 billion in cash total during 2012.
Apple also announced plans to buy back nearly $10 billion worth of the company’s shares. The buy backs will take place over a three-year period beginning 30 September 2012.
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…
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 programme.” — Tim Cook
What Cook said is right. Apple will still generate upwards of $60 billion in cash this year , despite the $10 billion dished out via the dividend payments this year, and the buy backs (spaced out over 3 years). Analysts are yet to figure out exactly how much of that cash will actually find its way into Apple’s cash hoard.