News: Apple Announces Dividend and Share Buyback

As expected, Apple’s early morning conference call included what many were expecting—a dividend on the stock and that the company would buy back some of the shares of the stock. The dividend of $2.65/share is pending approval of the board of directors and, if approved, would take effect in the fourth quarter of fiscal 2012, which starts on July 1.

A three-year, $10 billion stock buyback is already approved, and the will take place in fiscal 2013, which begins September 30, 2012. The press release has more:

The repurchase program is expected to be executed over three years, with the primary objective of neutralizing the impact of dilution from future employee equity grants and employee stock purchase programs.

“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,” said Tim Cook, Apple’s CEO. “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.”

“Combining dividends, share repurchases, and cash used to net-share-settle vesting RSUs, we anticipate utilizing approximately $45 billion of domestic cash in the first three years of our programs,” said Peter Oppenheimer, Apple’s CFO. “We are extremely confident in our future and see tremendous opportunities ahead.”

Looks like Apple took some of Michael Dell’s advice.