Microsoft to pay first dividend as profit jumps

Microsoft announced its first dividend and a two-for-one stock split as the world's largest software maker reported record sales…

Microsoft announced its first 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 year ending in June would be below analysts' estimates amid a slump in information technology spending.

Microsoft reported a net profit of $2.55 billion for the quarter ended December 31st, up from $2.28 billion, a year earlier.

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.

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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.

The dividend, which would add an estimated $100 million to Mr Bill Gates's fortune in the first year, will be payable on March 7th.