Intel raises dividend as corporate spending lifts earnings
INTEL, which employs over 4,000 people in Ireland, raised its dividend for the second time in six months as increasing corporate spending on technology boosts earnings.
The quarterly payout rises 16pc to 21 cents a share, Santa Clara, California-based Intel said yesterday in a statement. On November 12, it raised the dividend to about 18 cents.
"It's a great sign," said Ambrish Srivastava, an analyst with BMO Capital Markets in San Francisco who rates the stock "outperform".
"It shows their confidence in their business model and their ability to generate cash. It's also a very investor-friendly move."
Last month, Intel forecasted second-quarter sales that may top analysts' estimates as it benefits from booming demand for machines that deliver computing over the internet. Even as PCs come under pressure from tablets and mobile devices, Intel's 80pc share of the microprocessor market boosts sales when companies upgrade their server and PC fleets.
"Intel's current and projected growth is generating strong cash flow, allowing us to further increase our dividend," chief executive officer Paul Otellini said in the statement.
The shares added 57 cents to $23.60 on the Nasdaq Stock Market. The stock had gained 9.5pc this year as of yesterday.
The company had $12bn in cash, near-cash items and short-term investments as of April 2, according to its quarterly filing. Intel reported a 29pc increase in first-quarter net income last month, after profit more than doubled in 2010.
Last quarter, Intel used $4bn to re-purchase 189 million shares and had $10.2bn remaining in its stock re-purchase plan. (Bloomberg)