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Xerox axes dividend
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July 9, 2001: 4:48 p.m. ET
Copier maker anticipates $140M annual savings as turnaround continues
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NEW YORK (CNNfn) - Xerox Corp. said Monday that it is eliminating the dividend on its common stock, the latest move in a massive restructuring intended to keep the copier maker solvent.
Stamford, Conn.-based Xerox said it was cutting its five cents a share dividend to improve liquidity and restore shareholder value, saving the company $140 million annually.
"After serious deliberation, the Board of Directors chose to eliminate the dividend -- a decision that contributes to the progress Xerox is making in restoring its financial strength and helps to provide the flexibility required to build on the effective execution of its turnaround plan," CEO Paul Allaire said in a statement. "As Xerox returns to profitability, the Board will consider the reinstatement of dividends."
Xerox also chose not to declare the dividend on the company's employee stock ownership program preferred stock. Xerox will instead make an additional contribution to the ESOP trust. Previously the company had paid a quarterly dividend of $1.5625 per share on the preferred stock.
Xerox, which has pledged to turn a profit this year after three consecutive quarterly losses, has this year sold assets, cut jobs and, shut units in an attempt to right itself. It has done this while under a cloud of speculation about possible accounting irregularities and amid growing competition in the imaging industry.
Xerox (XRX: Research, Estimates) shares ended down 12 cents at $9.08 ahead of the announcement Monday. They fell another 43 cents to $8.65 in after-hours trade. 
from staff and wire reports
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Xerox
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