Apple to pay dividend and buy back shares

BBC's Rory Cellan-Jones explains why Apple is spending its cash now

Related Stories

Apple has said it will use its cash to start paying a dividend to shareholders and to buy back some of its shares.

The technology giant said it would pay a quarterly dividend of $2.65 per share from July.

It will buy back up to $10bn (£6.3bn) of its own shares starting in the company's next financial year, which begins on 30 September 2012.

At the end of last year, Apple revealed it had $97.6bn in cash. It expects to use $45bn over the next three years.

It is the first time Apple has declared a dividend since 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," Apple chief executive Tim Cook said in a statement.

"You'll see more of all of these in the future.

"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."

Apple shares have surged to about $600 in recent days, making it the world's most valuable company, with a stock market value of more than $500bn. Ten years ago, the shares were trading at about $10.

Booming sales of iPhones and iPads have helped the firm build up its huge cash pile.

"This is consistent with what we, and I think most, expected them to do, which is to address shareholder concerns around the huge cash stockpile while retaining enough of a reserve to keep a wide range of strategic options on the table," said John Jackson from CCS Insight.

"This, plus the buyback, should continue to bolster the soaring share price."

Shares in Apple ended Monday trading up 2.7%.

More on This Story

Related Stories

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

Features

  • Painting of the German surrender by Charles PearsMonstrous assembly

    Why did 270 warships gather peacefully in one place?


  • Emily Thornberry and her tweetOut flagged

    How exactly did the Thornberry tweet lead to her resignation?


  • Clanger and BagpussSaggy cloth cat

    What's the future for Children's TV favourite Bagpuss?


  • DerainArt of gaming

    The Tate Gallery goes 3D with Minecraft


  • Neo nazi marchers7 days quiz

    What trick did a German town play on neo-Nazi marchers?


BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.