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Maiden Microsoft payout

Seattle, Jan. 17 (Reuters): Microsoft Corp on Thursday announced its first-ever dividend and a two-for-one stock split as the world’s largest software maker reported record sales and a quarterly profit that edged past Wall Street expectations.

But the software giant also said revenues for the current quarter and the full-fiscal ending in June would be below analysts’ estimates amid a persistent slump in information technology spending.

Shares of Microsoft fell to $ 53.63 in after-hours trade from $ 55.35 at the close, a fall traders blamed in part on the cautious industry outlook offered by Microsoft chief financial officer John Connors.

“Our view continues to be that there has not been much change in the health of the PC ecosystem, where things have continued to be soft,” Connors said in a conference call.

Microsoft reported a net profit of $ 2.55 billion, or 47 cents per share for its fiscal second quarter ended December 31, up from $ 2.28 billion, or 41 cents per share a year earlier.

The latest quarter’s net profit contained several items, including a litigation charge of $ 210 million, or 3 cents per share, in addition to a $ 282 million investment impairment charge and a $ 126 million tax benefit.

The Redmond, Washington-based software giant had forecast a profit of 45 or 46 cents, which hadn’t factored in the charges, while analysts polled by Thomson First Call had been expecting 46 cents per share on average.

Revenue was $ 8.54 billion, a record high, within Microsoft’s own forecast range and up 10 per cent from $ 7.74 billion reported a year earlier. Unearned revenue, which is revenue to be recognised in future quarters, stood at $ 8.8 billion.

In a surprise move, Microsoft also said it would start paying dividends for the first time since going public in 1986, declaring a pre-split annual dividend of 16 cents per share.

Previously, Microsoft had said that it would hold on to its cash capital as long as there was the risk of large payouts from its cases with governments, rivals and consumers.

“We have resolved several of the significant legal issues and that’s given us more clarity about our long-term capital structure,” Connors said.

Modest outlook

Microsoft forecast March-quarter revenue of between $ 7.7 billion and $ 7.8 billion, just below the average analyst view of $ 7.96 billion, according to Thomson First Call. Prior-year third-quarter revenues were $ 7.25 billion.

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