Applied Materials Inc., the largest producer of chipmaking equipment, raised its quarterly dividend by 13 percent to 9 cents a share and said it plans to buy back as much as $3 billion of its stock in the next three years.
The dividend will be payable June 14 to shareholders of record May 24, the Santa Clara, California-based company said Monday in a statement. Applied had paid a dividend of 8 cents a share for the past four calendar quarters. The new stock-repurchase plan follows one started in 2010 that has less than $1 billion left, the company said.
Applied is returning more cash to shareholders after projecting higher fiscal second-quarter profit than analysts estimated last month. The forecast signaled that Applied’s customers -- semiconductor makers -- are stepping up equipment spending to ensure they can meet demand for chips used in smartphones, tablets and other mobile devices.
“Today’s dividend increase demonstrates confidence in our ability to continue to deliver strong cash flow performance across our business cycles,” Chairman and Chief Executive Officer Mike Splinter said in the statement.
Applied Materials fell 1.6 percent to $12.03 at the close in New York. The shares have jumped 12 percent so far this year, after declining 24 percent last year.
© Copyright 2014 Bloomberg News. All rights reserved.