Xerox will pay a cash dividend

Xerox announced its first quarterly cash dividend in six years and predicted double-digit earnings growth in coming years, citing new products and a stronger balance sheet.

A dividend of 4.25 cents a share will be payable Jan. 31 for shareholders of record Dec. 31.

“Declaring a dividend and our continued share repurchase initiatives reflect the health of our business and our belief in the long-term value we’re creating for Xerox shareholders,” said Anne M. Mulcahy, chief executive.

The company said the dividend would account for about 10% of its cash in the next fiscal year.

Shares of the printer and copier company rose 1.6%, or 26 cents, to $16.08.

Xerox has dramatically improved its balance sheet and introduced 100 products in the last three years, Mulcahy said. It has made key acquisitions, paid down debt and bought back stock, and its bond rating has returned to investment grade.

Norwalk-based Xerox Corp. said Monday it expects 2008 earnings per share growth in the range of $1.31 to $1.35, and double-digit earnings expansion continuing in 2009, to the range of $1.45 to $1.50.

Xerox said it is on track to deliver full-year 2007 earnings per share in the range of $1.18 to $1.20.