Apple to dole out $100B to shareholders by end of 2015


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A man leaves an Apple store with an iPhone and an iPad in his hands in central Beijing, China. Apple Inc., the maker of the iPhone and iPad, said it will distribute $100 billion to its shareholders by the end of 2015.

Associated Press

NEW YORK

Apple is opening the doors to its bank vault, saying it will distribute $100 billion in cash to its shareholders by the end of 2015. At the same time, the company said revenue for the current quarter could fall from the year before, which would be the first decline in many years.

Apple CEO Tim Cook also suggested that the company won’t release any new products until the fall, contrary to expectations that there would be a new iPhone and iPads out this summer.

Apple Inc. on Tuesday said it will expand its share-buyback program to $60 billion — the largest buyback authorization in history. It also is raising its dividend by 15 percent from $2.65 to $3.05 per share. That equates to a dividend yield of 3 percent at current stock prices. The average yield for the 20 largest dividend-paying companies in the U.S. is 3.1 percent, according to Standard & Poor’s.

Investors have been clamoring for Apple to give them access to its cash hoard, which ended March at an unprecedented $145 billion. Apple’s tight grip on its cash, along with the lack of ground-breaking new products has been blamed for the steep decline in its stock price over the winter.

News of the cash bonanza coincided with the company’s release of a poor quarterly outlook for the three-month period that ends in June.

Apple released its fiscal second-quarter earnings after the stock market closed Tuesday. The company’s stock initially rose 5 percent to $425 in extended trading, then retreated $2.63, or 0.7 percent, to $403.50 as the CEO talked about new products arriving in the fall.

The shares are still down 40 percent from a peak of $705.07 hit on Sept. 21, when the iPhone 5 went on sale.

“The decline in Apple’s stock price over the last couple of quarters has been very frustrating for all of us ... but we’ll continue to do what we do best,” CEO Tim Cook said on a conference call with analysts after the release of the results. But he reinforced that the company’s job is not to boost its stock price in the short term.

“The most important objective for Apple will always be creating innovative products,” he added.

Apple’s results beat the consensus estimate of analysts who follow the company, though it posted its first profit decline in 10 years.

Net income was $9.5 billion, or $10.09 per share, down 18 percent from $11.6 billion, or $12.30 per share, in the same period a year ago.

Revenue was $43.6 billion, up 11 percent from last year’s $39.2 billion.

Analysts were expecting earnings of $9.97 per share on revenue of $42.3 billion, according to FactSet.