Apple to pay dividend, buy back shares

NEW YORK — Apple announced Monday it will spend part of its massive cash hoard to pay its first dividend since 1995 to shareholders and buy back $10 billion in shares.

AFP photo

Apple said it would pay a quarterly dividend of $2.65 per share from its huge cash balance, estimated to be at least $97 billion from sales of its hugely successful gadgets like the iPad and iPhone.

The dividend payment would start with the company’s 2012 fiscal fourth quarter, which begins on July 1, Apple said in a statement.

The $10 billion share buyback will begin in fiscal 2013, which begins on September 30.

Apple said it expected the repurchase program to be carried out over three years in an effort to neutralize 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,” Tim Cook, Apple’s chief executive, said in the statement.

“Even with these investments, we can maintain a war chest for strategic opportunities and have plenty of cash to run our business.”

The dividend payment alone will cost the company $9.89 billion annually. Apple last paid a dividend in 1995.

In total, including its employee stock options, Apple intends to spend $45 billion over the next three years on these programs.

Apple shares jumped 2.35 percent to $599.32 in pre-market trading.

Apple, with total available cash and securities at record highs — some reports have said it has more cash on hand than the US government — has been under pressure to pay dividends to shareholders with some of those funds.

In its most recent quarter, Apple reported a record profit $13.06 billion while revenue soared to an all-time high of $46.33 billion.

Apple said it sold 37.04 million iPhones in the quarter that ended on December 31, up 128 percent from a year ago, and 15.43 million iPads, a 111 percent increase.

The California-based gadget-maker sold 5.2 million Macintosh computers in the quarter, up 26 percent, and 15.4 million iPods, a 21 percent decline from a year ago.

Its new iPad went on sale on Friday with Apple fans lining up from Sydney to San Francisco to snap up the latest model of the hot-selling tablet computer, but without the huge queues for some other Apple devices.