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Xerox cuts dividend
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October 9, 2000: 6:25 p.m. ET
Xerox cuts dividend 15 cents to 5 cents a share; will result in cost savings
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NEW YORK (CNNfn) - Xerox Corp. cut its quarterly dividend to 5 cents per share from 20 cents per share Monday, in an effort to save the embattled company $400 million on an annualized basis.
The Stamford, Conn.-based company said in a statement the money saved on dividend payments will be used to help realign Xerox's cost base and business structure.
"At the same time, it pays a dividend to our shareholders consistent with our current performance," said Paul Allaire, chairman and chief executive officer.
 Xerox (XRX: Research, Estimates) said Oct. 2 it expects a third-quarter loss of 15 cents to 20 cents a share, compared with a 12-cent-a-share profit forecast by Wall Street analysts. Monday's warning marks the fourth such warning issued by the Stamford, Conn.-based company during the last five quarters.
Analysts were encouraged by the announcement of the dividend cut.
"This [dividend cut] is the first of many steps that must be taken to get them back on track," said Gibboney Huske, analyst at CS First Boston.
"The dividend came in at the maximum level we [projected], and this possibly indicates a positive signal, that maybe things aren't quite as dire as they might look," Huske said.
"We thought the best thing might be to suspend the dividend temporarily, but if they feel comfortable to pay out at that level, that's a positive thing for them," she said, adding she had expected Xerox to pay a quarterly dividend of up to a maximum of 20 cents for all of 2001.
Shares of Xerox dropped 31 cents to $10.44, a new 52-week low. 
--from staff and wire reports
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