[Am-info] First-ever dividend for Microsoft shares

[Erick Andrews]

Here's the spin from the BBC.  Sounds specious.


http://news.bbc.co.uk/2/hi/business/2665883.stm

Microsoft had a good quarter 

The world's largest software company, Microsoft, has 
unveiled a healthy rise in quarterly profits, and further
cheered investors by announcing its first ever dividend 
payment.

For the first time since Microsoft shares began trading on a
stock market in 1986, shareholders will receive an annual
dividend of 16 cents per share.

However, the firm also cut its revenue targets, and as a
result Microsoft's share price took a tumble in after hours
trading.  On Friday the share price dropped 4.5% within
minutes of market open.

The company also said that it planned a two-for-one stock
split - which doubles the number of shares but halves the
share price, making the stock potentially more attractive to
small investors.

Microsoft recently settled several long-running law suits
after having been found guilty of abusing its monopoly
status in the computer software market.

IBM sales up

Elsewhere, on a mixed night for US technology companies,
profits were down at IBM but sales were up.

IBM said its quarterly profit fell for the sixth quarter in
a row, but sales of services and computer hardware rose.

The computer services, hardware and software company said
profits from continuing operations were $1.9bn, or $1.11 per
share, down from $2.6bn in the same period last year.

Continuing operations exclude IBM's hard disk drive business
in which it sold a majority stake to Hitachi at the end of
last year.

Microsoft shares tumble

Microsoft outstripped its own and Wall Street's expectations
as a new software licensing plan lifted profits.

Microsoft reported a net profit of $2.55bn, or 47 cents per
share, for the three months to 31 December, up from $2.28bn
in the same period last year.

Despite the strong results, Microsoft chief financial
officer John Connors said the world's largest software
company did not expect a significant upturn in global
spending on information technology in the short term.

As a result, shares of Microsoft tumbled to $53.83 in
after-hours trade from $55.35 at the close.

'Confidence' in Microsoft growth

The decision to start paying a dividend represents
Microsoft's transition from an archetypal "growth" company,
which reinvests profits in development, to one which pays
them to shareholders.

It has been under pressure to split its $40bn cash pile with
shareholders.

Mr Connors said:  "Declaring a dividend demonstrates the
board's confidence in the company's long-term growth
opportunities and financial strength.

"We are especially pleased to be able to return profits to
our shareholders, while maintaining our significant
investment in research and development and satisfying our
long-term capital requirements."

Most technology firms in the United States have never paid
dividends.

Investors were happy to make gains through rising share
prices, but with the technology sector in the throes of a
recession and stock markets well below their highs, share
holders are now expecting monetary rewards in return for
their investment.

-- 
Erick Andrews