Altera Initiates a Dividend

Altera(ALTR Quote) will initiate a quarterly dividend and step up its share buybacks, the company announced Wednesday.

The San Jose, Calif., maker of programmable logic chips said it would pay a 4-cent quarterly dividend on June 1 to shareholders of record on May 10.

The company's board also increased the number of shares authorized for buybacks under the company's share repurchase program by 50 million shares.

The new move brings the remaining number of shares authorized for repurchasing to 57 million. Altera said it intends to repurchase the shares in the open market or through structured transactions.

As of Wednesday, Altera said it had spent $145 million repurchasing 7.2 million shares year to date.

CEO John Daane said the company expects to spend $1 billion to repurchase shares in 2007 and the first half of 2008.

"Today's announcement to pay a dividend and to increase our share repurchase authorization demonstrates our commitment to use the company's strong cash flow for the benefit of our shareholders," Daane said in a press release.

In 2006, Altera generated $425 million in cash flow from operating activities and ended the year with $1.4 billion in cash and short-term investments on its balance sheet.

Altera shares were up 2.2%, or 45 cents, at $20.50 in extended trading Wednesday.