Print 14 comment(s) - last by W00dmann.. on Sep 18 at 3:26 PM

Microsoft is upping the quarterly dividend from $0.23 to $0.28

Microsoft is investing its cash into its own stock through a new share buyback program, and has also announced a dividend increase. 

Microsoft introduced a new $40 billion buyback program, which is replacing the previous program that expires September 2013. While the previous and new buyback programs are both set at $40 billion, the new one doesn't have an expiration date. 

This looks great for Microsoft because it shows that it wants to invest its own cash into its own stock. 

In addition to the buyback program, Microsoft is upping the quarterly dividend from $0.23 to $0.28, which is a 22 percent increase over that of the previous quarter. According to Microsoft, the dividend is payable December 12, 2013 to shareholders "of record" on November 21, 2013. 

“These actions reflect a continued commitment to returning cash to our shareholders,” said Amy Hood, chief financial officer of Microsoft. 

Microsoft has been particularly busy this year trying to turn things around after a failed Surface launch, a lack of enthusiasm for Windows Phone and complaints about Windows 8. The company is currently undergoing a restructuring process, where CEO Steve Ballmer will be out within the next year and devices like Windows Phone, PC and Xbox One will become more unified for a more fluid user experience. 

Microsoft is attempting to stay competitive with new efforts like buying Nokia's devices and services unit for $7.2 billion and holding a new Surface 2.0 event September 23 -- which will hopefully muster up more enthusiasm than the previous generation. 

Source: Microsoft

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Hardly laudable
By W00dmann on 9/17/2013 3:10:59 PM , Rating: 0
When a company can't innovate, invent, or implement any kind of new product, service, or efficiency, it can simply reduce its float and buy back some of its shares (likely using leverage) in order to keep shareholders happy. Classic.

What this really shows is that Microsoft is unable to compete, so it chooses the easy way to a short term stock "pop" while solving none of its structural problems. Hardly laudable.

RE: Hardly laudable
By Mitch101 on 9/17/2013 3:51:55 PM , Rating: 2
The New Bing?
The X-Box One with HDMI input/video overlay and Voice Control?
Kinect Style controls in the next gen Tablets/Phones?
IMAP and Skype in
Partnering with the Cable industry?
Buying Nokia just when they are about to go big?

RE: Hardly laudable
By W00dmann on 9/17/13, Rating: 0
RE: Hardly laudable
By Mitch101 on 9/17/2013 4:17:32 PM , Rating: 2
You know what Apple is without Steve Jobs right?

RE: Hardly laudable
By W00dmann on 9/18/2013 3:26:20 PM , Rating: 2
You seem to assume I'm some kind of Apple fan. I'm not making this comment to denigrate Microsoft to the credit of Apple in any way. What I'm saying is:

-take a look at MS's missed opportunities over the past 10+ years
-take a look at MS's stagnant share price over the past 10+ years

Now ask yourself, why would any company EVER spend its money buying back shares and increasing its dividend? That's a cost, no? Would a healthy, innovative company with a surging share price willingly spend gobs of money to artificially prop up its share price? Of course not.

RE: Hardly laudable
By Kiffberet on 9/18/2013 8:24:37 AM , Rating: 1
Look at the directors bonus 'incentives' package, and no doubt you'll find that increasing share price equates to a bigger bonus!

The easiest way to increase share price? That's right - share buyback!

The company has less to spend on R&D and acquisitions, and eventually falls behind competitors.
But the directors will have walked away by that time, to be employed by the next big company.


RE: Hardly laudable
By sorry dog on 9/18/2013 9:17:39 AM , Rating: 2
It's the story of American big business of the last 20 years.

Short-term gain at the expense of long-term prosperity.

From Deming's deadly diseases....

Emphasis on short-term profits: short-term thinking (just the opposite of constancy of purpose to stay in business), fed by fear of unfriendly takeover, and by push from bankers and owners for dividends.

RE: Hardly laudable
By MichalT on 9/17/2013 5:20:00 PM , Rating: 3
It more means that they're generating more cash than they can effectively deploy. Generally its better that companies return the cash to shareholders than do things like large acquisitions (remember Microsoft buying a bunch of cable company assets at the top of the market?) It remains to be seen whether Skype and Nokia purchases will be written down substantially like virtually every other large Microsoft purchase, but Microsoft is grotesquely profitable, generates more money than it can use, and should return it to its shareholders.

RE: Hardly laudable
By W00dmann on 9/18/2013 3:19:00 PM , Rating: 2
That assumes they are using some of their own cash hoard to buy back shares, versus borrowing the money (leverage) to do so given how dirt cheap rates are at the moment. If they do borrow instead of dip into their treasury, your argument becomes invalid.

RE: Hardly laudable
By milktea on 9/17/2013 7:30:08 PM , Rating: 2
I'm not sure how buying back stock relates to a company stops innovation or unable to compete. When company generates cash, they need to find ways to invest instead of letting the cash sit idle. And buying stocks is one type of investment, whether buy one's own stock or others.

Spending more money on R&D and/or acquiring other companies doesn't 'necessary' guarantee new prodcuts or innovations. For example, would you buy something that is inferior to what you have?
*I'm not saying MS have superior products, it is only an example*

RE: Hardly laudable
By yomamafor1 on 9/17/2013 8:40:03 PM , Rating: 2
Looks to me like M$ is trying to prop up the stock prices, so select (*cough*Ballmer*cough cough*) can sell his shares, and retire rich.

RE: Hardly laudable
By troysavary on 9/17/2013 10:15:04 PM , Rating: 2
Ballmer is already a multi-billionaire. I don't think he needs to do this to fund his retirement.

"It's okay. The scenarios aren't that clear. But it's good looking. [Steve Jobs] does good design, and [the iPad] is absolutely a good example of that." -- Bill Gates on the Apple iPad
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