In a move that could jolt its investors, General Electric says it's cutting its dividend in half, only the second time it's taken that move since the Great Depression.
CEO John Flannery says the company is cutting its quarterly payout to 12 cents a share from 24 cents a share effective next month.
"It's a necessary step," said WGY financial analyst Dennis Fagan of Fagan Associates in Troy. "and a pre-emptive step they took before they had to do it."
The move is seen as a way to free up money to fund a turnaround for the 125-year-old corporation.
"They either take the dividend from selling other assets, and perhaps they're going to do that anyway," said Fagan, "Or you take the dividend from raising debt, and you don't want to do that."
Reports indicate General Electric will focus on three core businesses, aviation, health care, and power generation. The Times-Union says plans are in place to cut $1 billion from the Schenectady-based Power unit, which employs about 4,000 people. There are no specifics on possible job cuts.
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