International Paper Makes Sharp Dividend Cut
- March 2, 2009
- Dividend News
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International Paper (IP: 31.48 +1.71%) announced today they are cutting their quarterly dividend by 90% to $.025 per share.
The dividend cut will reduce the company’s dividend yield from 17.6% to 1.8%.
The dividend cut was hardly unexpected as the declining economy has weighed heavily on the company’s performance. Wall Street is now only expecting IP to earn $.14 per share this year.
Since the beginning of the year, the stock has lost over half its value. And while cutting the dividend by 90% is expected to save the company $400 million, Wall Street reacted negatively to the news. In mid-morning trading, the stock was down 6.7% to $5.31.
“While our cash balances and cash flows remain solid, we believe it is prudent to manage cash conservatively in this uncertain economic environment,” said Chairman and CEO John Faraci.
The dividend will be payable on June 15, 2009 to shareholders of record as of May 18, 2009.
