Redmond (Washington), Jan 17: Software giant Microsoft Corp has said it would pay its first-ever dividend, as it reported a quarterly profit of $ 2.55 billion. The earnings, a 12 per cent jump from the same period a year ago, amounted to 47 cents a share, ahead of the Wall Street estimate of 46 cents a share. But the profit news was overshadowed by the news that the world's biggest software company, in a major shift in strategy, would pay a dividend to shareholders of 16 cents a share. The dividend will be paid ahead of a 2-1 stock split. The move represents a shift in strategy for the prototypical "growth" company that normally reinvests profits instead of paying them to shareholders. The company said it has some $ 43 billion in cash and short-term investments. "Declaring a dividend demonstrates the board's confidence in the company's long-term growth opportunities and financial strength," said John Connors, chief financial officer at Microsoft, yesterday.

"We are especially pleased to be able to return profits to our shareholders, while maintaining our significant investment in research and development and satisfying our long-term capital requirements."

Dividends have come under greater focus in recent weeks amid US president George W Bush's proposal of a tax reform measure that would exempt dividends paid to shareholders.

Connors, meanwhile, offered a guarded outlook for the coming year in technology amid tense scrutiny of a recovery in IT spending.

Bureau Report