International Business Machines Corp. (IBM) said Tuesday that its board of directors hiked the quarterly dividend by 13 percent and also authorized $7 billion in additional funds for use in the technology giant's stock repurchase program.
The Armonk, New York-based company's board declared a regular quarterly dividend of $0.85 per common share, representing an increase of $0.10, or 13 percent, from the prior quarterly dividend of $0.75 per common share.
This marks the seventeenth year in a row that IBM has increased its quarterly cash dividend. With the payment of the June 9 dividend, IBM will have paid consecutive quarterly dividends every year since 1916.
IBM's board has authorized $7 billion in additional funds for use in the company's stock repurchase program. Including the approximately $5.7 billion remaining at the end of March from a prior authorization, the company will now have about $12.7 billion for its stock repurchase program.
IBM said it expects to request additional share repurchase authorization at the board meeting in October 2012. The company noted that it has reduced its share count by a third since the beginning of 2000.
Ginni Rometty, president and chief executive officer of IBM said, "Since 2000, we have returned over $137 billion to shareholders in the form of dividends and share repurchases. At the same time, we continue to invest in capital expenditures, acquisitions and research and development, to keep IBM at the forefront of innovation."
Last Tuesday, IBM reported a 7 percent increase in profit for the first quarter, helped by strong revenue performance at its software and technology services businesses.
Net income for the first quarter was $3.07 billion or $2.61 per share, up from $2.86 billion or $2.31 per share for the year-ago quarter. Total revenue for the quarter grew 0.3 percent to $24.67 billion from $24.61 billion in the same period last year.
IBM has been acquiring small companies to drive growth and expand product offerings. The company has plans to make $20 billion worth of acquisitions between now and 2015. During the first quarter, IBM completed the acquisitions of DemandTec., Emptoris Inc. and Green Hat.
In Tuesday's regular session, IBM is trading at $201.02 2.40 1.21 percent on a volume of 1.25 million shares.
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