|Microsoft returns US$40b to shareholders
Microsoft announced a new US$40 billion share buyback as part of an effort to return more cash to stockholders. It will also increase dividend by 22 percent, to 28 US cents a share.
The new share buyback comes on the heels of another share repurchase plan announced in 2008, which was set to expire on September 30.
“These actions reflect a continued commitment to returning cash to our shareholders,'' said Microsoft chief financial officer Amy Hood in a statement.
The maker of Windows software had been the undisputed leader of the tech sector for years, but it has recently been overtaken in market value by Apple and Google.
Microsoft shares gained 0.59 percent to close at US$32.93 Tuesday. A buyback generally boosts the value of a stock by reducing the number of outstanding shares.
Citi analyst Walter Pritchard argued in a research note that “there is much more room for Microsoft to return more capital through dividend.''
Microsoft has more than US$70 billion in cash holdings, much of which is held overseas. Like Apple and some other tech firms, Microsoft has held off repatriating the cash, which could be subject to the top corporate tax rate of 35 percent.
The company has sent out invitations to a September 23 event at which it is expected to unveil new Surface tablets to challenge iPads and Android devices dominating the market.—AFP