Buoyed by reports the chipmaker may hand back some of its plentiful cash hoard to investors, Intel ( INTC) shares were higher Monday, bucking broader declines in the semiconductor arena. "The outside directors do believe that some cash should be returned," the Financial Times quoted Intel's Chief Financial Officer Andy Bryant as saying. "The question is how to do it and by how much." The discussions were likely encouraged by last week's
surprise announcement from Microsoft ( MSFT), which said it would double its regular dividend, buy back up to $30 billion in stock over the next four years, and issue a special one-time dividend of $3 a share. Intel was recently up 22 cents, or 1%, to $22.89, while the Philadelphia Stock Exchange was off 1.31% to 400.3. For the second quarter, Intel reported cash and short-term investments of $14.3 billion, with another $2.7 billion in trading assets. However, the FT report also said Intel didn't plan to make any immediate decision about what to do with the money. Asked to comment, Intel spokesperson Robert Manetta said the company "generally doesn't comment on what plans if any the board may or may not be considering," adding that the board periodically reviews its cash position. Manetta said the board discussion was not prompted by the Microsoft decision, noting its agenda had been set before Microsoft's news was announced. Over the long term, Manetta said, Intel has used share buybacks and dividends as a way to return cash and value to shareholders. But he said Intel is "fundamentally different" from a software company, because its business is so capital-intensive. This year Intel's R&D budget is projected to be over $4 billion. Over the last four to five years, Manetta estimated that Intel has spent close to $20 billion to build new leading-edge semiconductor fabs that manufacture chips from 12-inch wafers.
In the latest quarter, the chipmaker spent $1.5 billion to buy back 56 million shares of stock, in part to offset dilution from a generous options program. The company has bought back 1.99 billion shares under an existing 2.30 billion-share buyback authorization. In the first quarter of this year the chipmaker doubled its dividend to 4 cents a share.