IBM Rewards Shareholders by Boosting Dividend by 50 Percent

By Stan Gibson  |  Posted 2006-04-25 Print this article Print

The jump was the largest per-share quarterly dividend increase in the company's history, according to IBM.

Reflecting a quarter of strong profits, IBMs board of directors boosted the companys quarterly dividend by 50 percent, to 30 cents per common share, up from 20 cents per share in the previous quarter. The jump was the largest per-share quarterly dividend increase in the companys history, according to IBM. The announcement came April 25 at IBMs annual shareholders meeting in Tulsa, Okla. At the meeting, the board also announced the company will buy back $4 billion worth of its stock. The previous week, IBM announced annual revenue of $91 billion, up 3 percent over the previous years total, excluding IBMs divested PC business.
In the companys first quarter, IBM reported $20.7 billion in revenue and profit of $1.7 billion, which was up 21 percent from the companys disappointing first quarter of 2005 and is at its highest point since 1996.
At the shareholders meeting, CEO Samuel Palmisano described IBMs 2005 results as "solid," and the earnings per share for the first quarter as "excellent." In his remarks, Palmisano said the performance was due to changes the company has been implementing since he took the reins in 2002. "As I have reported to you in the past, we have transformed this company from top to bottom." He listed several initiatives, including: a reorganization of the companys European management structure, which was designed to increase customer contact; the establishment of so-called "deal hubs," that bring together sales support and client services, a move that he said has increased the companys rate of customer wins; continued emphasis on middleware sales, which now make up more than half of software revenue. For more on IBMs middle kingdom, click here. "Your company is now better balanced, more productive and more profitable than it was just a few years ago," said Palmisano, adding that the uncertain times that followed the dot-com boom and bust have now receded. "I am convinced that the head winds we faced as we entered this decade are now largely behind us," the IBM CEO said. IBMs need to grow contrasts with strong results. Click here to read Stan Gibsons IBM Watch blog. IBM took the occasion to announce several customer deals. IBM said oil refiner Citgo will use IBM servers and storage products, including IBMs TotalStorageDS 4800, x460, p570 and p520 and BladeCenter systems. Citgo will run its trading and scheduling, supply chain management, human resources and finance operations on the IBM gear. IBM also announced that Circuit City has signed a deal with IBM Global Services to overhaul the consumer electronics retailers merchandising and supply chain systems, using IBMs WebSphere Product Center middleware and Oracles Oracle Retail applications. Financial terms of the deals were not disclosed. Check out eWEEK.coms for the latest news, views and analysis on servers, switches and networking protocols for the enterprise and small businesses.
Stan Gibson is Executive Editor of eWEEK. In addition to taking part in Ziff Davis eSeminars and taking charge of special editorial projects, his columns and editorials appear regularly in both the print and online editions of eWEEK. He is chairman of eWEEK's Editorial Board, which received the 1999 Jesse H. Neal Award of the American Business Press. In ten years at eWEEK, Gibson has served eWEEK (formerly PC Week) as Executive Editor/eBiz Strategies, Deputy News Editor, Networking Editor, Assignment Editor and Department Editor. His Webcast program, 'Take Down,' appeared on He has appeared on many radio and television programs including TechTV, CNBC, PBS, WBZ-Boston, WEVD New York and New England Cable News. Gibson has appeared as keynoter at many conferences, including CAMP Expo, Society for Information Management, and the Technology Managers Forum. A 19-year veteran covering information technology, he was previously News Editor at Communications Week and was Software Editor and Systems Editor at Computerworld.

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