The 5-cent increase in the dividend, worth about $400 million a quarter, is about 3 cents per share more than many analysts had expected.
The company also announced a share repurchase programme of up to $40 billion, which has no expiration date, to replace a $40 billion programme set to expire on September 30. 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 six to 12 months, Nomura Securities analyst Rick Sherlund said in a note.
A hotly anticipated investor meeting on Thursday will give Microsoft shareholders their first chance to press management on its plans to replace chief executive Steve Ballmer, who last month announced plans to retire within a year.
Ballmer made the announcement just weeks after he unveiled a One Microsoft grand plan for the company to focus on hardware and cloud-based services. But poor sales of the new Surface tablet, on top of Microsofts years-long failure to make money out of online search or smartphones, have cast doubt on the plan.