Ahead of today's annual meeting (starts at 12:30PM ET, webcast), Qualcomm (QCOM -2.2%) has hiked its quarterly dividend by 10% to $0.53/share (implies a 4.1% yield). The hike will be effective for dividends payable after March 23.
Possibly weighing on shares (amid a 1% Nasdaq drop): The U.S. Commerce Department has slapped sanctions on Chinese smartphone/telecom equipment vendor ZTE over alleged attempts to re-export controlled items to Iran. The sanctions require U.S. suppliers of parts and equipment to ZTE to apply for an export license; the Commerce Department says it's operating under a "policy of presumption of denial" for granting licenses.
Qualcomm's chips have gone into plenty of ZTE phones and base stations, and Qualcomm is four months removed from striking a new 3G/4G licensing deal with ZTE. Aside from that, the ZTE sanctions are stoking fears China will retaliate with its own sanctions against U.S. firms
Earlier: Optical component firms sell off due to ZTE sanctions
Qualcomm (NASDAQ:QCOM) has launched a $15B buyback program that will replace a prior program with $2.1B remaining. The company plans to buy back $10B worth of shares within 12 months, on top of a current commitment to return 75% of free cash flow to shareholders. At current levels, the new buyback is good for repurchasing ~1/8 of all outstanding shares.
The quarterly dividend has been hiked by $0.06 (14%) to $0.48/share; that's good for a 2.6% yield at current levels. It will be effective for dividends payable after March 25.
Qualcomm spent $1.7B on buybacks in the December quarter (FQ1). With the company ending the quarter with $3.6B left on its buyback authorization, today's announcement suggests it has spent $1.5B on buybacks since.
A 20% dividend increase and $5B buyback hike was announced a year ago. Qualcomm plans to raise debt to finance the new capital returns. The company had $31.6B in cash/marketable securities and no debt at the end of FQ1.