Xerox Eliminates Quarterly Dividend

Xerox Corp. on Monday eliminated its quarterly dividend for the first time since its inception in 1948, yet another cost-cutting move by the office equipment maker bent on returning to profitability this year.

Stopping the 5-cents-a-share quarterly payment doesn’t reflect unanticipated second-quarter developments, the company said.

Xerox hasn’t changed its guidance about second-quarter earnings, spokeswoman Christa Carone said. In June, the firm forecast a second-quarter operating loss in line with its first-quarter loss of $86 million, or 12 cents a share.

Xerox slashed its quarterly dividend from 20 cents to 5 cents in October. Eliminating the payout entirely will save the company $140 million annually.

“This savings is in addition to the progress Xerox has made in generating cash and strengthening liquidity through cost reductions, improved working capital management and the sale of $2 billion in assets,” Chairman and Chief Executive Paul Allaire said.

Xerox also chose not to declare the dividend on the company’s employee stock ownership program preferred stock and will instead make an additional contribution to the ESOP trust.

Xerox shares fell 12 cents to $9.08 on the New York Stock Exchange before the news was announced. In after-hours trading, the stock fell to $8.55. It hit a low of $4.44 in December.