![]() Revenue tumbled 33% last quarter at GE Power due to “continued market and execution challenges.” The division swung to a loss of $631 million, compared with a profit of $464 million the year before. GE’s power division remains the biggest source of trouble at the company, drowning out strength from its aviation business. “Let me state in a straightforward fashion, we have no plans for an equity raise,” Culp told analysts. Some analysts have said GE Capital needs a cash infusion totaling billions of dollars. Culp will not take half measures to improve the company,” CFRA analyst Jim Corridore wrote to clients.īut GE tried to hush calls for the company to strengthen its balance sheet by selling stock. “We find the move brave and necessary and a sign that Mr. Just two S&P 500 companies had cut their dividend as of early October, Silverblatt said. At least 291 S&P 500 companies have hiked their dividend so far this year, according to Howard Silverblatt of S&P Dow Jones Indices. Most companies, flush with cash from tax cuts, are ramping up their dividends. They just don’t know,” said John Inch, an analyst at Gordon Haskett.ĭividend cuts are very rare these days, because the US economy is booming. ![]() They didn’t even tell you what the earnings and cash flow will look like. Investors may have been spooked by the fact that GE did not even offer guidance for the fourth quarter or 2019. “We are on the right path to create a more focused portfolio and strengthen our balance sheet,” Culp said in a statement.Ĭulp, who was suddenly named CEO on October 1, acknowledged during a conference call “this is not a quarter that we’re particularly proud of.” The dividend cuts deal a blow to the many GE retirees and mom-and-pop shareholders who long relied on the cherished payouts. But years of bad decisions forced GE to halve its dividend last November for just the second time since the Great Depression. It’s an especially painful move for a company that long viewed its stable dividend as a source of pride. By paying just a token dividend, GE ( GE) will save about $3.9 billion of cash per year.Īnalysts had been anticipating a potential dividend cut, though not one of this magnitude. In a bid to fix GE’s debt-riddled balance sheet, Culp announced the company will cut its quarterly dividend from 12 cents a share starting in 2019. The news adds to GE’s mounting legal problems and helped send the stock plunging 9% to a nine-year low. The company also announced that the SEC and Justice Department are investigating the charge, which reflects the deterioration of businesses GE has acquired. Culp plans to split up the power division to accelerate a turnaround. ![]() GE revealed on Tuesday worse-than-expected results and a $22 billion accounting writedown for its beleaguered power division. ![]() General Electric is under such financial stress that new CEO Larry Culp is slashing the troubled conglomerate’s 119-year-old dividend to just a penny a share. ![]()
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