Xerox slashed its quarterly dividend by 75 percent Monday, to 5 cents per share, citing its recent financial troubles.
Last week, the company warned it would post a third-quarter loss of between 15 cents and 20 cents per share. Analysts had been expecting earnings of about 12 cents per share.
The company’s recent problems — part of a yearlong struggle — have analysts speculating that the world’s largest copier company is a likely takeover target.
A New Plan for the Future The company’s board of directors said the reduced dividend — down from 20 cents per share in the second quarter — is part of a broader management plan to restore long-term value to shareholders and bondholders.
“This decision helps to provide Xerox with additional financial flexibility required to implement our plans to realign our cost base and business structure to a stronger and more profitable business model,” Chairman Paul Allaire said in a prepared statement.
“At the same time, it pays a dividend to our shareholders consistent with our current performance,” he said.
Allaire and Anne Mulcahy, president and chief operating officer, had previously announced a plan to improve the company’s profitability and cash flow that includes the sale of certain assets and major cost reductions. The company said last week that it also was reviewing its dividend level.
The common dividend is payable Jan. 1, 2001, to shareholders of record on Dec. 1, 2000.