GE cut their dividend by a whoppoing 68% to preserve capital in 'uncertain markets.' The company also said that there are no plans to raise additional capital and dilute common shareholders, with the same confidence which they had in January when Jeff Immelt said that they would not cut the dividend in 2009.
Here is a February 5, 2009 video interview with Jeff Immelt:
Immelt Says Important for GE Not to Cut Divident in 2009
The Wall Street Journal interviewer provides an example of an interview from the prior March in which Jeff Immelt was optimistic about earnings and then shortly thereafter "BAM! A big miss. Does this mean you and your guys don't know what's going on?"
Well, BAM again.
Reuters
GE cuts quarterly dividend to protect liquidity
Fri Feb 27, 2009 2:50pm EST
BOSTON (Reuters) - General Electric Co plans to cut its quarterly dividend to 10 cents a share starting in the second half of 2009, a move that it said would provide it with more "flexibility" in the face of a recession.
The U.S. conglomerate said it had no plans to raise additional equity, and that reducing its dividend from 31 cents a share would save it about $9 billion a year.
The news had been widely expected on Wall Street even prior to GE's statement earlier this month that its board would re-evaluate the payout....
"We have determined that reducing the dividend ... is a prudent measure to further enhance our balance sheet and provide us with additional flexibility," said Chief Executive Jeff Immelt in a statement.
As recently as January, Immelt had defended the dividend. In November, the Fairfield, Connecticut-based company said it planned to pay the 31-cent quarterly dividend through 2009.
Still, troubles at its GE Capital finance unit had led some investors to wonder whether keeping the dividend was a good idea....
