Wall Street Journal
Intel Corp.'s board approved a 12.5% dividend increase, the latest indication that technology companies are growing more hopeful about the economic recovery.
The increase puts the chip giant's quarterly dividend at 15.75 cents a share and marks the first change to the dividend since the second quarter of 2008. Intel, which began issuing dividends in 1992, has boosted its payout 14 times since then.
Technology companies have been among the first to experience a rebound in business, in part because they sell heavily to countries in Asia that have emerged more quickly from the recession. Intel has been reporting stronger-than-expected results lately; its cash and investments stood at $12.9 billion at the end of September, up from $11.3 billion at the end of June.
"The dividend increase is another sign of our confidence in business prospects going forward," said Paul Otellini, Intel's chief executive officer, in prepared remarks.
One cause for uncertainty was removed last week, when Intel and rival Advanced Micro Devices Inc. announced a settlement of a high-stakes antitrust case set to go to trial in March. Intel agreed to pay AMD $1.25 billion and to adopt limits on some sales practices.
Intel is "encouraged with AMD behind them," said Timothy Luke, an analyst at Barclays Capital. "Their business trends now remain solid, and they are generating cash."
Intel shares rose 41 cents, or 2.1%, to $20.23 in 4 p.m. composite trading Monday on the Nasdaq Stock Market. The stock has risen about 50% over the past 52 weeks.
The company is the 11th listed in the Standard & Poors 500-stock index to announce a dividend so far in November, said Howard Silverblatt, a senior index analyst with S&P. But he added that the recession continues to have lingering effects on payouts, which he estimates are about $53 billion lower in aggregate for S&P 500 companies this year. "It's going to take years to bring that back up," he said.
Despite Intel's short-term optimism, the company and Newsweek magazine Monday released the results of a survey that showed only one-third of Americans see the country retaining technological leadership over the next 30 years. Some 63% of Chinese respondents predicted their country would overtake America in technology innovation during that period.
Justin Rattner, Intel's chief technology officer, said the survey showed that Americans feel technology is important to the economy but the results point to needed changes by industry and government in managing research-and-development investments and boosting educational achievement in the U.S.
"We do understand our own challenges, and we understand the challenge our competitors are facing," Mr. Rattner said. "With that knowledge, we can take the right steps."
The increase puts the chip giant's quarterly dividend at 15.75 cents a share and marks the first change to the dividend since the second quarter of 2008. Intel, which began issuing dividends in 1992, has boosted its payout 14 times since then.
Technology companies have been among the first to experience a rebound in business, in part because they sell heavily to countries in Asia that have emerged more quickly from the recession. Intel has been reporting stronger-than-expected results lately; its cash and investments stood at $12.9 billion at the end of September, up from $11.3 billion at the end of June.
"The dividend increase is another sign of our confidence in business prospects going forward," said Paul Otellini, Intel's chief executive officer, in prepared remarks.
One cause for uncertainty was removed last week, when Intel and rival Advanced Micro Devices Inc. announced a settlement of a high-stakes antitrust case set to go to trial in March. Intel agreed to pay AMD $1.25 billion and to adopt limits on some sales practices.
Intel is "encouraged with AMD behind them," said Timothy Luke, an analyst at Barclays Capital. "Their business trends now remain solid, and they are generating cash."
The company is the 11th listed in the Standard & Poors 500-stock index to announce a dividend so far in November, said Howard Silverblatt, a senior index analyst with S&P. But he added that the recession continues to have lingering effects on payouts, which he estimates are about $53 billion lower in aggregate for S&P 500 companies this year. "It's going to take years to bring that back up," he said.
Despite Intel's short-term optimism, the company and Newsweek magazine Monday released the results of a survey that showed only one-third of Americans see the country retaining technological leadership over the next 30 years. Some 63% of Chinese respondents predicted their country would overtake America in technology innovation during that period.
Justin Rattner, Intel's chief technology officer, said the survey showed that Americans feel technology is important to the economy but the results point to needed changes by industry and government in managing research-and-development investments and boosting educational achievement in the U.S.
"We do understand our own challenges, and we understand the challenge our competitors are facing," Mr. Rattner said. "With that knowledge, we can take the right steps."
