IBM hikes dividend 10%, ups buyback

Tech giant commits to repurchasing another $3 billion of stock, despite tepid sales in its recent quarterly report.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By David Goldman, CNNMoney.com staff writer

Which of these car companies will continue to operate in one form or another?
  • General Motors
  • Chrysler
  • Both
  • Neither

NEW YORK (CNNMoney.com) -- IBM said Tuesday that it will increase its quarterly dividend by 10% and will repurchase an additional $3 billion of its stock.

The Armonk, N.Y.-based tech company will pay a dividend of 55 cents per share on June 10 to shareholders of record on May 8. That's up 5 cents from its most recent dividend and marks the 14th year in a row that IBM has hiked its dividend. Last year, the company raised its quarterly payout by 25%.

IBM also said it would extend its share repurchase program after the board authorized another $3 billion of buybacks. As of March 31, the company had $3.7 billion remaining from its previous $15 billion repurchase authorization in February 2008, giving IBM authorization to buy back a total of $6.7 billion so far in 2009.

Though the company's dividend increase and share repurchase allotment is down from last year, an IBM spokesman said economic headwinds were not a factor.

"We think it's an appropriate amount that allows the company to reinvest in business," he said.

The moves come amid a slew of announcements from IBM in the past two weeks, including a commitment to cloud computing, a return to the IBM branding on its networking unit and the development of a computer that can compete on the TV game show "Jeopardy!"

After rival Oracle (ORCL, Fortune 500) snatched away Sun Microsystems (JAVA, Fortune 500) for $7.4 billion last Monday, IBM reported a modest decline in first-quarter profit and sales but said it said it is ahead of pace to meet its profit goal of $10 to $11 per share by the end of 2010.

"Our continued solid performance allows us to increase shareholder return, as we are doing today," said IBM Chief Executive Samuel Palmisano in a statement. The spokesman declined to comment about IBM's acquisition plans.

Shares of IBM (IBM, Fortune 500) rose 2% in afternoon trading. To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
Want to buy -- and live in -- a piece of history? It's not that far out of reach. These historic homes are not only for sale, they are incredible bargains. More
5 ways retailers are tracking you If you think pesky salespeople are invading your personal space, check out these 5 technologies that are tracking your movements throughout a store. More
Moto X vs. Droid Turbo: Which Droid should you buy? Motorola has made the two best Android smartphones this year. Here's how they stack up. More
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.