DOW JONES NEWSWIRES
International Paper Co. (IP) slashed its quarterly dividend 90%
to 2.5 cents a share as the company looks to save about $100
million a quarter and repay debt more quickly.
The paper-products giant has already reduced capital spending,
cut jobs and frozen salaries as it looks to preserve liquidity.
International Paper's shares were down 3.2% at $5.51 in early
trading. The stock is down nearly 80% since September and is off
53% this year. Goldman Sachs analysts predicted last month that the
company would cut its payout by midyear.
International Paper reported in January it swung to a
fourth-quarter loss amid a "severe contraction" in demand,
especially in North America.
Standard & Poor's analyst Stuart Benway said at the time,
"We expect conditions in IP's markets to remain difficult in the
coming quarters, with reduced demand for industrial packaging and
office papers due to the weak economy." He added that cost-cutting
measures should cushion the blow to earnings and allow IP to be
profitable.
-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089;
kerry.grace@dowjones.com