Caterpillar to Split Shares, Up Dividend (2005-6-10)

Caterpillar Inc., a maker of construction machinery and engine systems, said Wednesday that the company will split its shares two-for-one and increase its quarterly dividend.

The company said the move is a reaction to its recent strong financial results. Caterpillar will increase its dividend 22 percent to 50 cents per share from 41 previously, on a pre-split basis. After the split, this will become a 25 cent dividend. Caterpillar said the increase is the largest in its history.

The split will take effect July 13 and apply to shareholders of record from June 22. The dividend will be paid Aug. 19 to stockholders of record from July 22.

Caterpillar also said it will increase its goal for share buybacks to accomodate the split and set the new target at 640 million shares by October 2008, double the 320 million previously announced.

The company has posted regularly strong sales over recent quarters and said in April that its first-quarter earnings rose 38 percent over the same period last year.

Caterpillar shares rose $1.95, or 2 percent, to $96.48 in midday trading on the New York Stock Exchange.

(Source: yahoo.com)