Avery Dennison Corp. said Thursday that it would cut its second-quarter dividend in half as profit plunged 57 percent on lower sales. The company also ploughed money into speeding up its debt payoff.

The Pasadena label and office supply company reported net income of $39.8 million (38 cents per share), compared with $92.4 million (93 cents) a year ago. Sales fell 20 percent to $1.46 billion, with declines in all its business units.

Excluding restructuring charges and other one-time items, Avery earned 56 cents per share. Analyst surveyed by Thomson Reuters on average expected adjusted profits of 36 cents per share on revenue of $1.54 billion.

The company said it would cut its dividend to 20 cents per share to accelerate its debt reduction efforts. Avery has been working to cut its debt from the $1.34 billion purchase of Paxar Corp two years ago.

“The possibility of continued poor market conditions beyond 2009, along with increased pension funding requirements, compels us to take precautionary action,” Chief Executive Dean Scarborough said in a statement.

The Securities and Exchange Commission this week announced that Avery had agreed to pay more than $500,000 in fines and other costs to settle a U.S. regulator’s claim it bribed foreign government officials to win contracts.

Avery shares closed down $3.16, or 10.6 percent, to $26.65 on the New York Stock Exchange.