Microsoft Corp announced a new US$40 billion share buyback on Tuesday as part of an effort to return more cash to stockholders.
The tech giant, which has seen its stock stagnate in recent years, also said it was increasing its dividend by 22 percent, to US$0.28 a share.
The new share buyback comes on the heels of another share repurchase plan announced in 2008, which is set to expire on Sept. 30.
“These actions reflect a continued commitment to returning cash to our shareholders,” Microsoft chief financial officer Amy Hood said in a statement.
The move comes with Microsoft in transition, having announced the departure of chief executive Steve Ballmer within a year.
Microsoft, which is trying to refocus the company around “devices and services” after missing the transition to mobile computing, also recently announced it was buying the mobile phone division of Nokia Oyj.
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 Inc and Google Inc.
Microsoft shares rose 0.59 percent to close at US$32.93 on Tuesday. A buyback generally boosts the value of a stock by reducing the number of outstanding shares.
Morgan Stanley analyst Keith Weiss said the news was a “modest” positive for Microsoft, but added that investors may be cautious because of the “struggling devices strategy.”
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.
Microsoft is holding its analyst day this week, where it will discuss the strategy and rationale behind the Nokia acquisition.
“Investors remain unconvinced of the logic behind the Nokia deal, thus management should clearly articulate why a smartphone presence is critical to the long-term success of Office and Windows,” Barclays analyst Raimo Lenschow said in a note to clients.
“Additionally, with many long-only investors unsure about how the new strategy will affect Microsoft’s financial model, we expect goalposts to be provided to help investors understand how the transition will play out.”
Lenschow said the buyback plan was in line with expectations, but that the time frame for the program was not clear.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is expected to remain Apple Inc’s primary chip manufacturing partner despite reports that Apple could shift some orders to Intel Corp, industry experts said yesterday. The comments came after The Wall Street Journal reported on Friday that Apple and Intel had reached a preliminary agreement following more than a year of negotiations for Intel to manufacture some chips for Apple devices. Taiwan Institute of Economic Research (台灣經濟研究院) economist Arisa Liu (劉佩真) said TSMC’s advanced packaging technologies, including integrated fan-out and chip-on-wafer-on-substrate, remain critical to the performance of Apple’s A-series and M-series chips. She said Intel and Samsung
POWER BUILDUP: Powered by Nvidia’s B200 Blackwell chips, the data center would support MediaTek’s computing power demand and business growth, the company said Smartphone chip designer MediaTek Inc (聯發科) yesterday launched a new artificial intelligence (AI) data center with a maximum capacity of 45 megawatts to meet its rising demand for computing power required to develop new advanced chips for AI applications. The company has completed the first-phase computing power buildup at the data center in Miaoli County’s Tongluo Township (銅鑼), providing 15 megawatts of capacity to support its research and development (R&D) capabilities, despite an industrywide shortage of key components, MediaTek said. Supply constraints have plagued a wide range of key components, including memory chips, solid-state drives, power supply units and central
IMAGE SENSORS: The Japanese company would be the controlling shareholder of the venture, with development and production lines to be set up in Kumamoto Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said it has signed a non-binding memorandum of understanding (MOU) with Sony Semiconductor Solutions Corp to create a joint venture to develop and produce next-generation images sensors. The partnership seeks to explore and address emerging opportunities in physical artificial intelligence (AI) applications, such as automotive and robotics, paving the way for innovations and expanded technological advancements, TSMC said in a statement. Sony would be the majority and controlling shareholder of the joint venture, the statement said, adding that the company would set up development and production lines in its newly constructed fab in Kumamoto Prefecture’s
Shares of contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) came under pressure yesterday after a report that Apple Inc is looking to shift some orders from the Taiwanese company to Intel Corp. TSMC shares fell NT$55, or 2.4 percent, to close at NT$2,235 on the local main board, Taiwan Stock Exchange data showed. Despite the losses, TSMC is expected to continue to benefit from sound fundamentals, as it maintains a lead over its peers in high-end process development, analysts said. “The selling was a knee-jerk reaction to an Intel-Apple report over the weekend,” Mega International Investment Services Corp (兆豐國際投顧) analyst Alex Huang
RSS