IBM Raises Dividend / AP

The Financial Times reports on the dividend increase. Analysts expected the payout to be $1.2 per share. Last quarter, the company paid $1.1 in dividends per share.

The increase will cost the company an additional $197.7 million and will bring the stock's dividend yield to 3%.

IBM Chief Executive Ginni Rometty said in a company statement that the dividend increase reflects IBM's growth through the company's strategic initiatives and its move to higher value.

IBM shares have fallen 10% over the past 12 months, but on Tuesday afternoon they were up 1.4% to $173.08, The Wall Street Journal reports.

Scheduled redemption

IBM maintains plans to repurchase its own shares. The company's board of directors approved a new $5 billion share repurchase program in October, according to a press release from the American company. It will expand the current similar program, which had $1.4 billion unused as of the end of September. The issue of further increasing the size of the repurchase of its own shares is expected to be considered at a board meeting in April.

IBM is in the midst of a painful transformation, while its financial results are suffering from a strong dollar and its hardware business, sales of which continue to fall. The company's quarterly revenue has fallen for 12 straight quarters.

IBM's hardware division earned $1.7 billion in hardware sales in the first quarter of 2015, down $0.7 billion from the same period last year. However, this was mainly due to the sale of its low-cost server business to China's Lenovo, while the American giant focused on more profitable mainframe and Unix-based machine deliveries.

IBM management believes that the server business is showing signs of recovery: excluding asset sales and currency factors, its revenue would have grown by 30% in the past quarter.

Many IT companies now rent infrastructure from cloud service providers or buy inexpensive servers from new manufacturers. In this environment, IBM is trying to rebuild its strategy again. It did this in the 1990s, mastering software development and providing services. The company is gradually abandoning the hardware business, which formed the basis of its 104-year history. About 10 years ago, the corporation sold its personal computer division, then got rid of the production of inexpensive servers, and last year transferred its semiconductor production to Globalfoundries.

The main priorities for IBM now are cloud systems, the Internet of Things, and business analytics. IBM has entered into strategic partnership agreements with Apple, Twitter, The Weather Channel, Johnson & Johnson.

Cloud technologies and services brought the company $25 billion in revenue last year, about 27% of its total annual revenue. IBM management plans to invest $4 billion in developing this business in 2015 and expects that by 2018 cloud technologies will bring it approximately $40 billion a year, or 40% of its total revenue.

IBM to Significantly Increase Dividends