U.S. Steel Slashes Dividend By 83%
- April 28, 2009
- Dividend News, Featured
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U.S. Steel (X: 48.90 +4.67%) announced yesterday that they are reducing their quarterly dividend by 83% to $.05 per share.
The dividend cut reduces the company’s dividend yield from 4.3% to only 0.7%.
News of the dividend cut came as U.S. Steel announced a first quarter loss from operations of $478 million. Last year, the company earned $266 million in the same period.
Commenting on the first quarter results, U. S. Steel Chairman and CEO John P. Surma said, “Weak customer demand for flat-rolled products, coupled with customers’ efforts to reduce inventories, has resulted in very low order rates and further downward pressure on prices for our Flat-rolled and U. S. Steel Europe (USSE) segments. Our tubular operations have also experienced a severe downturn primarily as a result of reduced drilling activity due to lower oil and gas prices, high inventory levels and unprecedented levels of unfairly traded and subsidized tubular imports from China.”
Reducing the quarterly dividend is expected to save the company $116 million per year.
The dividend is payable on June 10, 2009 to shareholders of record as of May 13, 2009.
U.S. Steel’s stock price was down 3.5% today to $26.74 on the news. Since the beginning of the year, the stock has fallen over 28% compared to only an 8% decline in the Dow Jones index.
