Apple CEO Tim Cook will hold a conference call this morning. Image via CrunchBase
Apple will pay a $2.65 per share quarterly dividend starting later this year, and begin a $10 billion share buyback program, the company said this morning.
The share repurchase will occur over three years and will try to limit share dilution from future employee equity stakes, Apple said. The dividend will come sometime in its fiscal fourth quarter, which starts in July. Annualized at $10.60, it would yield 1.77%.
In all, Apple will use $45 million in three years, Chief Financial Officer Peter Oppenheimer said in a conference call this morning. Apple had $97.6 billion in cash at the end of last year, fueling rumors about how it would spend it.
“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,” CEO Tim Cook said. “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.”
This is the first time Apple has paid a dividend in 17 years. Apple concluded a stock split was not a good option at this time, but would revisit the decision later if it seemed like it would benefit shareholders, Cook said.
Apple shares rose 1.2% to $592.31 this morning. The tech firm competes with companies like Amazon, IBM, Microsoft and Oracle.
Reach Abram Brown at abrown@forbes.com. Or follow him at @abebrown716.
