IBM, in the midst of a turnaround, raised its quarterly dividend by 18 per cent to $1.30 a share, the 20th straight year of increase.

The payment, announced during its annual meeting, is up from $1.10 a share. Analysts had projected $1.20, according to the average of estimates compiled by Bloomberg.

The 20-cent increase will cost IBM about $791 million more a year compared with last year’s dividend. Chief executive officer Ginni Rometty has worked to refocus the 104-year-old company on new initiatives like cloud computing and data analytics.

Those businesses haven’t grown fast enough to outpace declines in older software and services products, and the stock has dropped 10 per cent in the past year, while the Dow Jones Industrial Average gained 10 per cent. IBM rose 0.4 percent to $171.35 in early trading in New York.

The Armonk, New York-based company’s stock was the biggest decliner in the Dow Jones Industrial Average in 2013 and 2014.

Last week, the company posted first-quarter earnings ,excluding some items, of $2.91 a share, beating analysts’ estimates that were already significantly lowered. Revenue fell for the 12th straight quarter on a year-over-year basis to $19.59 billion, short of analysts’ average projection.

IBM is still planning to spend the lowest amount on buying back shares in more than a decade. The company has about $5 billion remaining in its share authorisation. That's down from $6.3 billion in January, which represents the majority of what will be spent on repurchases in 2015, the company said at the time. - Bloomberg