Updated: July 12, 2020 (January 20, 2003)

  Analyst Report

Dividend, Split Announced as Revenue Tops USUS$8 Billion

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937 wordsTime to read: 5 min

Microsoft announced a two-for-one stock split and will begin paying annual dividends to shareholders on Mar. 7, 2003. The announcements coincided with the company’s earnings report for the second quarter (ending Dec. 31, 2002) of its 2003 fiscal year, a quarter that saw a record US$8.54 billion in revenues. However, profit was down slightly from the previous quarter and has remained flat over the last two years. Given this trend and the likelihood of a challenging FY’04, the dividend and split are primarily meant to increase the stock’s appeal to investors.

(For an overview of Q2’03 financial results and how they compare with previous quarters, see the chart “Microsoft Financials for the Last Five Quarters“.)

Increasing Investor Appeal

The two-for-one split will be applicable to all shareholders who own stock on Jan. 27, 2003; the stock price will be cut in half on Feb. 18. Microsoft has split its stock eight times before, but only when the price of shares was US$90 or higher. (It was trading at US$55.35 when this split was announced.)

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