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General Electric

General Electric lower its dividend for the second time since the Great Depression

General Electric (GE) will focus on energy, healthcare and aviation, setting a target profit in range 1.00-1.07 USD per share next year, representing a downward revision of the previous forecast. The company plans to reduce the size of Board of Directors to 12 from 18 members, as well as adding three new directors in 2018. The details will become clear during the upcoming annual general meeting of shareholders.

The company said it focused on the business where it sees the best growth potential and where it has good technology, scale and large customer base, as well as where it can use its digital productivity software.

The big news for the US industrial giant is to cut the dividend for the second time since the Great Depression, which gives the depth of the financial troubles of the company. It plans to reduce the quarterly dividends to 0.12 USD per share, which must save 4 billion USD for the year.

The GE’s shares are one of the most popular US stocks with countless shareholders, including retirees relying on dividend payments. But the company is under enormous pressure to restore investor confidence. Shares lost one third of their value this year.

This is the second time the company cuts its dividend – the previous one was in 2009 during the Great Recession.

The cuts in dividends are rare nowadays. Many companies increase them because the US economy is healthy and the stock market is booming.

About James McGovern

James McGovern is from Arizona, USA. He is business analyst and writer at Finance Apprise Journal, responsible for finance and trading sections, as well as news from USA and Canada.

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