Microsoft is boosting its quarterly dividend to 28 cents a share, a 5 cent increase — slightly more than Wall Street analysts had been expecting. The company also says its board has authorized another $40 billion in share repurchases, replacing a previous repurchase program that was set to expire.
“These actions reflect a continued commitment to returning cash to our shareholders,” said Amy Hood, Microsoft chief financial officer, in a statement.
The increase, announced this morning, is the latest change at the company as it comes under increased pressure to boost value for shareholders. The move comes after Steve Ballmer announced plans to retire as CEO, the company reached a $7.2 billion deal for Nokia’s devices business, and Microsoft’s board agreed to give a seat to activist investor ValueAct Capital.
“We view this as a further indication that things are changing at Microsoft with respect to corporate governance that we believe could benefit shareholders over the next 6–12 months,” says analyst Rick Sherlund of Nomura Equity Rsearch in a note to clients this morning. “The new CEO search could result in a tighter focus on its lines of business (we have suggested search and Xbox lose money and are not essential, but Windows, Office and Server and Tools belong together just as hamburgers, fries and chicken nuggets are complementary and all make sense in Value Meals at McDonalds).”
The announcement comes in advance of Microsoft’s meeting with financial analysts Thursday afternoon in Redmond.