Cisco Systems Inc., the world's largest maker of computer-networking gear and San Jose's largest employer, said Tuesday that it plans to start paying a dividend. The time line is not pending anytime soon. The company only said the dividend payment would happen before the end of its current fiscal year next July.
Dividends from high tech company's are unusual. Some in Silicon Valley even see them as old fashioned. But analyst say Cisco has lots of cash on hand and apparently couldn't find anything else to spend it on like buying more companies.
Cisco didn't say how big the dividend would be, saying it would determine it in the coming months while considering tax policy and broader market conditions.
Cisco shares rose 73 cents, or 3.4 percent, to $21.99 in early afternoon trading Tuesday.
Cisco had $40 billion in cash on July 31. However, $33 billion of that sits at overseas subsidiaries. Like other big exporters, Cisco has been reluctant to bring the money back to the U.S., to be taxed at the 35 percent corporate rate.
Because it needs some of its U.S. cash for other corporate needs, Cisco may have to tap its overseas hoard to pay a dividend.