Why Xerox Plunged on Friday
Shares of printer and services giant (NASDAQ: XRX) plunged 13.7% on Friday as of 1:30 p.m. ET, after the company announced a reduction in its dividend -- the second cut in the span of six months.
The dividend cut isn't a great sign of confidence, but a positive, if there is one, is that the cut was made ahead of the closing of a large acquisition. So, it's probably prudent for Xerox to devote more cash to paying down acquisition debt, given current global economic uncertainty.
Back in December 2024, Xerox announced the $1.5 billion acquisition of Lexmark International, an existing Xerox partner that provides innovative imaging solutions. Since Xerox is increasing its existing $3.3 billion debt load -- though just $1.7 billion outside of the debt that finances its equipment leases -- Xerox decided to cut its dividend, from $1 per share annually to $0.50.
Source Fool.com
