Apple updates investors about its $97.6bn cash pile

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An Apple employee counts money as a customer purchases Apple's new iPad in New York March 16. The company announced Monday it will use some of its vast cash holding to pay a dividend to shareholders. (Shannon Stapleton/Reuters)

Apple Inc, the world’s most valuable company, is soon going to introduce a regular quarterly dividend of $2.65 per share in July and would buy back up to nearly $10 billion of its stock in the coming year 2013.

Tim Cook, Apple’s CEO, said: “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.”

“Innovation is our most important objective at Apple,” he said on a conference call with investors. “These decisions will not close any doors for us.”

He also said that the company would be still in competition with rivals for other strategic opportunities. Cook also anticipated to use nearly $45 billion of domestic cash in the initial three years of the buyback and dividend programme.

ISI Group analyst Brain Marshall said the makers of the iPhone, iPad and iPod have nearly secured $98 billion in cash and securities which is equal to roughly $104 a share.

Apple said it will pay a quarterly dividend of $2.65 a share some time in July. The payment is equivalent to a dividend yield of 1.8%, below the level paid by tech concerns such as Microsoft but higher than the 1.5 per cent paid by IBM. Its estimated $10bn dividend will be second only to AT&T, in terms of absolute payout among US companies.

“The move would make us one of the highest dividend payers in the US while allowing the company to quickly take advantage of strategic opportunity,” Peter Oppenheimer, chief financial officer, said during the conference call.

Reports say Apple last paid a dividend in 1995 while Thomson Reuters data shows they posted a net loss of $816 million the next year.

John Strand, chief executive of Copenhagen based Strand Consulting, said Apple is an over capitalised company and its for the good that they have cash in the shareholder’s pockets than in Apple’s pockets.

Colin Gillis an analyst at BCG Partners said: “For a lot of people who own this stock, some dividend is better than no dividend,”

The shares were also hiked by 1 percent in premarket trading after it was at a halt earlier in the morning.

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