- General Electric’s board of directors announced plans to cut the company’s dividend by 50% to $0.12 a share.
- The company is said to be considering other cost-cutting measures.
- This was the first dividend cut by GE since 2009.
General Electric’s board of directors on Monday announced plans to cut the company’s dividend in half to $0.12 a share.
“We understand the importance of this decision to our shareowners and we have not made it lightly,” GE’s chairman and CEO, John Flannery, said in the release. “We are focused on driving total shareholder return and believe this is the right decision to align our dividend payout to cash flow generation.”
The dividend cut wasn’t the only news to come on Monday. In its GE Investor Update Presentation, the company gave a disappointing outlook for 2018 adjusted earnings. The company sees full year 2018 adjusted earnings of $1 to $1.107 a share, well below the $1.18 that Wall Street is expecting.
In addition, GE says it expects revenue growth of 0% to 3% in 2018 and that iw will target 2% to 4% long-term organic revenue growth.
Monday's announcement comes amid cost-cutting efforts at the company as Flannery looks to improve the bottom line. In its latest quarterly report, released in October, GE cut its profit forecast for the fiscal year to $1.05 to $1.10 a share, down from its previous forecast of $1.60 to $1.70.
In addition to the dividend cut, the company is considering job reductions "across all of its diverse businesses," Reuters reports, citing sources. Layoffs of sales staff and other employees in its software division are said to be coming.
GE most recently cut its dividend in 2009, during the depths of the financial crisis.
The company will discuss additional business and strategy updates at the GE Investor Update, beginning at 9 a.m. ET on Monday.
