SAN JOSE, California (Reuters) - Cisco Systems Inc plans to begin paying a dividend for the first time from 2011, returning some of its growing cash hoard to investors.
Shares of the company climbed 3.5 percent after CEO John Chambers said on Tuesday the time was right to start paying a dividend to shareholders in fiscal 2011, and sees a dividend yield of about 1 to 2 percent.
Chambers, speaking at a financial analyst meeting, said he would not alter his business strategy despite near-term challenges in the economy and "a couple bumps" over the next year.
In August, the CEO known as one of Silicon Valley's strongest cheerleaders sent jitters through markets after he warned of "unusual uncertainty" in the economy and industry, stoking fears that a recovery in tech spending could wane.
In a prepared presentation on Tuesday, Cisco said it was seeing "mixed signals" today. But Chambers said the company would remain focused on long-term business trends.
Cisco shares climbed to $22 after the dividend comments.
(Reporting by Ritsuko Ando, editing by Dave Zimmerman)