Feeds

Intel commits $10bn to buybacks, juices dividend

Happy days are here again

Choosing a cloud hosting partner with confidence

Intel got the technology sector rolling this morning by announcing that it would be shelling out big bags of cash to buy back its own shares from Wall Street. The company also did a modest increase of its dividend.

Rather than give a big cash payout to shareholders, Intel has taken the financial engineering approach and set aside another $10bn to go down to Wall Street and buy back its own shares from stockholders, letting them cash out as the chip maker's stock is trading at $21 a pop. That's about three bucks better than the bottom set by Intel's share price in September 2010, but still off from the high of $24.37 set in April 2010. Intel has a market capitalization of $116.1bn as El Reg goes to press with 5.58 billion shares outstanding.

"In 2010, Intel achieved its best and most profitable year ever," Paul Otellini, Intel's president and CEO, said in a statement announcing the buybacks. "Today's announcement signals confidence in our fundamental business strategies both today and looking forward, allowing us to return more cash to shareholders."

Intel currently has $5.5bn in cash, $11.3bn in short-term investments, and $5.1bn in trading assets as the fourth quarter of 2010 came to a close. Intel had $2.1bn in total debts, which is pretty small for a $43.6bn company.

Intel already had an authorization to buy up to $4.2bn in shares from its board of directors, and $14.2bn in shares coming out of Wall Street and into Intel's safe will have a considerable impact on earnings per share if Intel does the buybacks quickly.

In addition to the share buyback expansion, Intel also said that it was boosting its dividend slightly. And what I say slightly, I mean slightly – up to 18.12 cents per share per quarter. That is a seven-tenths of a per cent increase from the 18 cents per share that the chip maker announced in January 2010, when it boosted the dividend by 15 per cent beginning with the first quarter of 2011.

Intel started giving out a dividend in 1992, and since that time it has paid about $21bn in dividends. In 2010, Intel paid $3.5bn in dividends to shareholders, which is great money if you happen to own lots and lots of Intel shares (as the top brass at Intel certainly do, so this is a kind of pay raise for them).

Not surprisingly, Intel started buying back its own shares before it began giving out a dividend. The share repurchases at the chip maker started in 1990, and since that time Intel has bought back 3.4bn shares with a then-current value at the time of each purchase of $70bn. ®

Internet Security Threat Report 2014

More from The Register

next story
Fujitsu CTO: We'll be 3D-printing tech execs in 15 years
Fleshy techie disses network neutrality, helmet-less motorcyclists
Trousers down for six of the best affordable Androids
Stylish Googlephones for not-so-deep pockets
Intel's LAME DUCK mobile chips gobbled by CASH COW
Chipzilla won't have money-losing mobe unit to kick about anymore
First in line to order a Nexus 6? AT&T has a BRICK for you
Black Screen of Death plagues early Google-mobe batch
Ford's B-Max: Fiesta-based runaround that goes THUNK
... when you close the slidey doors, that is ...
prev story

Whitepapers

Seattle children’s accelerates Citrix login times by 500% with cross-tier insight
Seattle Children’s is a leading research hospital with a large and growing Citrix XenDesktop deployment. See how they used ExtraHop to accelerate launch times.
Why CIOs should rethink endpoint data protection in the age of mobility
Assessing trends in data protection, specifically with respect to mobile devices, BYOD, and remote employees.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Protecting against web application threats using SSL
SSL encryption can protect server‐to‐server communications, client devices, cloud resources, and other endpoints in order to help prevent the risk of data loss and losing customer trust.