SEATTLE Microsoft hangs on to cash despite pleas

The company says it has legal issues to clear before it can boost dividends.
SEATTLE (AP) -- Microsoft Corp. may have put one of its biggest lawsuits behind it, but the software giant is still loath to share much of its ever-growing cash hoard with stockholders.
It now holds $49 billion, and shareholders have clamored to see more of it since the company paid an 8-cent-per-share dividend in March.
But Microsoft, which reached a $750 million lawsuit settlement with AOL Time Warner in May, said Thursday it wants to clear up some other legal hurdles before committing to another dividend or other such plan just yet.
"We really have to get through a couple of very significant legal issues both in terms of what the financial impact could be and the business model impact could be," said Microsoft chief financial officer John Connors. But he also said the Redmond, Wash.-based company has heard shareholders' angst over the dividend dearth.
Quarterly results
The news comes after weeks of speculation by investors and analysts that Microsoft could increase its dividend -- some reports predicted as much as a $10 billion payout -- when it announced its fourth-quarter results.
Still, the company delivered some good news to investors, raising its outlook for the coming year.
For the April-June quarter, the software titan earned $1.92 billion, or 18 cents a share, up 26 percent from last year's quarterly profit of $1.53 billion, or 14 cents a share.
Microsoft reported revenue of $8.07 billion, up 11 percent from $7.25 billion for the same period a year ago.
Excluding a one-time charge from the company's AOL settlement, Microsoft reported a profit of 23 cents a share, bettering a comparable gain of 21 cents per share last year.
On that basis, Microsoft's profit fell a penny short of the consensus estimate of analysts surveyed by Thomson First Call. Microsoft exceeded the analysts' revenue projection of $7.88 billion.
Microsoft blamed higher expenses, particularly for sales and marketing, for falling short of Wall Street forecasts.
Some think Microsoft still might come through with another dividend. The company can well afford it, said Alan Davis, vice president of McAdams Wright Ragen. "The cash hoard still builds."
For its full fiscal year, Microsoft reported a profit of $10 billion, or 92 cents a share, compared with $7.8 billion, or 70 cents a share, for the previous year. The company posted revenue of $32.2 billion, up from $28.4 billion in 2002.