(Updates with closing price in fifth paragraph.)
April 29 (Bloomberg) -- International Business Machines Corp. raised its quarterly dividend by 16 percent to $1.10 per share as Chief Executive Officer Ginni Rometty tries to appease shareholders while the company shifts businesses.
IBM announced the increase from 95 cents a share in a press release today before the start of its annual meeting. The new dividend is more than the $1.05 a share projected, according to data compiled by Bloomberg. The 15-cent increase will cost Armonk, New York-based IBM about $625 million a year.
Earlier this month, IBM reported its eighth straight quarterly decline in revenue as it shifts its business from hardware to cloud computing and data analysis. Rometty is banking on a strong comeback in the coming quarters as she aims to deliver on a forecast for adjusted earnings of at least $18 a share this year. The larger-than-expected dividend boost comes as IBM plans to reduce its pace of stock buybacks following an $8.2 billion splurge in the first quarter.
“Today’s announcement reinforces our commitment to delivering value to shareholders,” Rometty said in the statement. “We will continue to invest aggressively in our strategic growth areas including cloud, big data analytics, social, mobile and security to position the company to drive growth and higher value for our clients.”
IBM shares rose 1 percent to $195.11 at the close in New York. The world’s largest provider of computing services has now gained 4 percent in 2014, after being the only stock to drop in the Dow Jones Industrial Average last year.
The company said that today marks the 19th straight year that it has increased the dividend payout.
“I am very grateful to the shareholders for your unwaivering support,” Rometty said at today’s annual meeting in Jacksonville, Florida.
IBM said earlier this month that it won’t sustain its rate of share repurchases from the first quarter, when buybacks more than tripled from a year earlier to the most since 2007. The company plans to spend less than $5.8 billion total in the final nine months of this year.
The repurchases had helped IBM meet projections for earnings per share simply by reducing the number of shares in circulation.