Apple unveils $45bn share buyback and dividend plan

Apple chief executive Tim Cook has fulfilled a longstanding desire of investors by initiating a quarterly dividend and share buyback that will pay out $45bn (€34.2bn) over three years.

The world’s most valuable technology company will start paying its first dividends since 1995 — a regular quarterly payout of $2.65 a share — in July, and buy back up to $10bn of its stock beginning in the next fiscal year.

The $10bn annual dividend programme, which Mr Cook said will be reviewed periodically, ranks among the largest current US corporate cash payouts.

But he told analysts yesterday that “making great products” remained Apple’s top priority, echoing the sentiments of his former boss, Steve Jobs, who died in October after a long battle with cancer.

Mr Jobs’ former lieutenant has impressed Wall St since taking the helm. He has made his mark by revealing Apple’s production partners and initiating investigations into allegations of labour abuse in its supply chain.

Now, the man once hailed as an able deputy and supply chain guru, is reaching out to Wall St.

“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,” Mr Cook said.

“You’ll see more of all of these in the future.”

“Innovation is the most important objective at Apple and we will not lose sight of that.”

When he was announced as chief executive, many on Wall St worried he lacked Steve Jobs’ vision for devising groundbreaking consumer electronics.

However, Apple’s shares have gained more than 50% since the Silicon Valley icon’s death and set a record above $600 last week, as investors noted the assurance with which Mr Cook has taken the reins.

He oversaw the roll-out of the iPhone 4S last year and presided over what he said yesterday was a “record weekend” of sales for the new, 4G-enabled iPad.

But many investors are still waiting to see an Apple TV or something similar: a gadget that will transform the industry the way the iPod and iPhone did. On a conference call, one of the first questions that cropped up regarded the company’s product pipeline. Mr Cook declined to comment.

Apple expects the share buyback programme to run over three years, with the primary objective to offset the impact of employee stock options and equity grants.

Its annual dividend yield will come in around 1.8%. That ranks above Oracle and IBM but falls just short of the average of around 2.4% for companies in the Standard & Poor’s 500 index, analysts say.

The company will still maintain a “war chest” for other strategic opportunities, Mr Cook said. “These decisions will not close any doors for us.”

The company employs close to 3,000 people in Ireland, mostly at its Hollyhill plant located on Cork city’s northside.