Dividends the latest victims of the debacle
With reductions at 60 firms, Sept. was the worst month for payouts since S&P began keeping records in 1956.
Dividend cuts by U.S. companies increased more than 550 percent during the third quarter from the year-earlier period as the credit crisis curbed profits, Standard & Poor's Corp. said yesterday.
Payouts were lowered by 138 of the 7,000 companies surveyed, compared with 21 decreases in last year's third quarter, S&P said. Dividends were increased by 346 companies, down 21 percent from the third quarter last year.
Financial companies accounted for about two thirds of the cuts and 93 percent of the cost to shareholders of the cuts, which totaled $22.5 billion, S&P said. Profits by companies in the S&P 500 Index probably declined 5.6 percent during the quarter from a year earlier, the fifth straight drop, according to analyst estimates compiled by Bloomberg News.
With 60 reductions, September was the worst month for dividends since S&P started keeping records in 1956, said Howard Silverblatt, senior index analyst at S&P. Dividends were eliminated last month by such weakened companies as American International Group Inc., Fannie Mae, Freddie Mac, Lehman Bros. Holdings Inc., and Washington Mutual Inc.
General Motors Corp. suspended its dividend in July for the first time since 1922.
Dividends were reduced during the quarter by Wachovia Corp., Citigroup Inc., Regions Financial Corp., Comerica Inc., XL Capital Ltd., and Synovus Financial Corp.
In the Area
Dividend changes announced in the third quarter by companies with headquarters or major operations in the Philadelphia area.
Company Percent
change
Harleysville Group +20
West
Pharmaceutical +7.1
Verizon +7.0
Harleysville Savings +5.3
Radian Group -6.5
Wachovia -87
Royal Bancshares -100
SOURCE: Inquirer research
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