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Apple Remains Focused on Innovation as it Uses Cash to Reward Investors

by Sean P. Aune | March 19, 2012March 19, 2012 6:41 am PST

Apple Valued at Most Valuable Company in the World

Apple assured analysts and the media this morning that it remains focused on innovation as it prepares to issues a stock dividend and initiate a share repurchase program.

Following up on this mornings press release announcing some of its plans for its enormous war chest of cash, Apple CEO Tim Cook and CFO Peter Oppenheimer held a conference call to answer some questions about where this use of cash may leave the company.  Mr. Cook ran down a list of the companies successes and how is optimistic that the company still has a lot of room to grow.  One thing he did stress, however, was that the company plans to keep enough cash on hand to invest further in research & development, acquire strategic partners and further develop their own infrastructure.  Tim Cook assured callers that, “innovation is our most important objective.”

One of the most intriguing aspects of the call was when Peter Oppenheimer finally addressed where the upcoming $2.65 per share dividend would come from.  The question on most people’s lips this morning was whether it would come from the war chest or current income, meaning that it would not cut into the $98 billion stockpile Apple is sitting on.  Well, it’s coming from current income, which means that even after spending $10 billion over the next three fiscal years for share repurchases, the war chest isn’t going to deflate by all that much.  Oppenheimer said that the company expects to spend $2.5 billion per quarter on the dividends, or $10 billion per fiscal year.

Tim Cook has requested that he does not receive the dividend for his shares.

Although it was announced at the beginning of the call that no other subjects would be discussed, Gene Munster of Piper Jeffrey couldn’t ressit asking if there would be a press release any time soon about the sales for the first weekend of the new iPad.  Time Cook reminded him that this call wasn’t about that, but he did state the company had had a record weekend and that they were very happy.

It’ll be interesting to see where Apple share prices go today after the requests of shareholders have finally been answered.  Apple stock opened up 1.5 percent this morning from its Friday close of $585.57.


Sean P. Aune

Sean P. Aune has been a professional technology blogger since July 2007, but his love of tech dates back to at least 1976 when his parents bought...