DOW JONES NEWSWIRES
Building-products maker Masco Corp. (MAS) on Friday slashed its
dividend 68% to conserve some $240 million a year in cash and said
it sees "extremely challenging" market conditions lasting for "the
next several quarters."
Shares fell 5.8% in premarket trading to $7.30. The stock
through Thursday was down more than 60% since September.
The company, which has seen demand for its home-improvement
products fall prey to the housing downturn.
The dividend cut to 7.5 cents a share will help Masco "ensure
its ability to fund its business operations" and "relatively
modest" debt coming due early next year while being able to take
advantage of "growth opportunities that may arise," it said.
Companies across the spectrum have been cutting dividends in an
effort to save money amid the recession and an overall pullback in
customer spending. Masco's comes with new-home construction and
repair and remodeling spending expected to remain weak in 2009.
The maker of faucets, cabinets and other building products
projected last month - when it reported a wider fourth-quarter net
loss - that housing starts would fall another 35% this year on top
of 2008's 30% decline.
Fitch Ratings pushed Masco's credit ratings to junk territory,
the latest in a series of downgrades for the company in the last
several months. Fitch cited the building-products maker's
deteriorating financial results and credit metrics, driven by the
housing woes.
-By Mike Barris, Dow Jones Newswires; 201-938-5658;
mike.barris@dowjones.com