General Electric’s (GE) share price dropped by ~10% to below $10 a share during Tuesday’s trading day, as its new CEO Larry Culp started the post-earnings conference call.
119 year-old GE’s shares dropped to as low as $9.87 per share on Tuesday, their lowest levels since hitting $9.80 a share in April 2009. The stock was also in-line for its biggest one-day drop since March 2009.
GE reported third-quarter earnings and revenue that again missed analyst’s expectations. However, the major highlight of the conference call was the slashing of the troubled conglomerate's dividend to just a penny a share to save cash, underpinned by worst-than-expected financial stress.
Furthermore, the $22 billion accounting write-down for its beleaguered power division made the balance sheet of the company look all the more debt-riddled.
Confirming the company’s mounting legal problems, the CEO further added that its plan to split up the power division to accelerate a turnaround and expects the dividend cut to provide an additional cash worth $3.9 billion per year. Market analysts mostly forecasted a dividend cut, but not of this magnitude especially for a company that long viewed its stable dividend as a source of pride.