Here are the key figures in Microsoft Corporation’s most recent announcement: US$40 billion for sales repurchase and a 22% increase in dividend compared to the previous quarter. The increase in dividend for and the buyback program are rewards for the company shareholders. The key announcement was made on Tuesday by the world’s leader in software solutions. A meeting for financial analysts is set on Thursday and the announcement was made to herald this activity.
The company has been providing excellent services to persons and businesses alike since 1975. In the past few years, Microsoft stocks have not been performing spectacularly. After the announcement on Tuesday, Microsoft’s shares increased by 1.4%.
Dividend increase for last quarter
The Board of Directors of Microsoft declared a $0.28 dividend per share which amounts to a 22% increase compared to that of last quarter. This is equivalent to a 5% increase per share. For shareholders of record on November 21, 2013 the dividend is payable in a few months, specifically on December 12, 2013. November 19, 2013 is the ex-dividend date. This means that Microsoft will be paying a 3.4% dividend yield.
Brand new share repurchase program
The other key approval made by the Board concerns $40 billion worth of share repurchases. There is an existing share repurchase program that is set to expire on September 30, 2013. This was launched in the year 2008. Microsoft’s Chief Financial Officer, Amy Hood stated that the sale repurchase renewal is an expression of their commitment to the company’s shareholders. Buybacks are intended to increase the value of available shares in the open market since the number of shares will be reduced. This will indeed be very beneficial to Microsoft investors.
The recently authorized amount of $40 billion replaces this soon-to-expire scheme worth $40 billion as well. For this one, an expiration date is not given. The new scheme is open-ended. Hood said that this action ensures cash returns to Microsoft shareholders. There have been a few glitches for Microsoft in the past years especially with the stagnation of stocks, but it is apparent that the company is intent on becoming more relevant and competitive. Google and Apple have proven to be Microsoft’s fiercest competitors and its market value has been usurped by the two.
Microsoft in the news
Microsoft has been figuring in the news in the past few months. It was announced that CEO Steve Ballmer would be stepping down. It has also been made public earlier this month that Microsoft acquired Finnish mobile phone giant Nokia for a staggering $7.2 billion.
The last quarter ended with Microsoft reporting a net income of $5 billion. Its balance sheet for the recently concluded quarter presents a total of $7 billion in cash which is considered disappointing. Still, it adds up to a total of $21.9 billion. Microsoft’s recent income has earned it a place as one of four companies from the United States with high AAA credit rating. The software company is in a transition phase and one of its main goals is to make shareholders happy with more cash returns for them.
Photo Credit: Microsoft Sign
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