Microsoft says it will raise its dividend by 22%, an increase of a nickel to 28 cents a share. In addition, directors approved a $40 billion stock buyback program, setting no expiration date. Amy Hood, Microsoft’s financial chief says “These actions reflect a continued commitment to returning cash to our shareholders.”
Microsoft’s share repurchase program replaces a previous $40 billion repurchase program that was set to expire at the end of the month. This new buyback program does not have an expiration date.
Microsoft reported it had $77 billion in cash on its balance sheet. It also reported nearly $5 billion in net income in what was considered a disappointing quarter, bringing its full fiscal year earnings to $21.9 billion.
The latest dividend raise will cost the company an additional $422 million a quarter.
Investors are more encouraged about Microsoft’s efforts to turn more of its software into online variants for which the company can charge recurring subscription fees. Microsoft has said its subscription version of the Office business-software bundle is on pace to generate $1.5 billion a year in annual revenue.
Shares of Microsoft rose slightly in early trading today.