GE Cuts Dividend [Immelt admits hell can freeze over...]

[GRG55]

GE is finally accepting they have to pay more attention to the balance sheet than the stock price. Another FIRE economy "law of nature" falls by the wayside....

The ironic part about this is that if they had attended to the balance sheet all along, most likely the stock would be higher today than it is. That the ratings agencies persist in the myth of a triple-A credit rating is a complete joke...

GE Said to Cut Dividend to 10 Cents From 31 Cents


Feb. 27 (Bloomberg) -- General Electric Co. cut its annual dividend for the first time since at least 1940 as Chief Executive Officer Jeffrey Immelt moved to preserve cash and protect the company’s top AAA rating during a global recession, a person familiar with the decision said.

The quarterly dividend was lowered to 10 cents a share from 31 cents for the Fairfield, Connecticut-based company, the person said. The move is intended to save GE, which has paid a dividend for 110 years, about $9 billion a year...

...U.S. companies are reducing dividends at the fastest rate in half a century, hoarding cash and squeezing investors who depend on the payouts more than ever to boost returns. GE’s dividend has been providing a yield of about 14 percent as the shares trade at lows not seen since the mid-1990s...

[jk]

Re: GE Cuts Dividend [Immelt admits hell can freeze over...]

aren't you glad you didn't buy this financial in industrial drag? i wish there were a way to just buy the industrial side of ge's business.

[metalman]

Re: GE Cuts Dividend [Immelt admits hell can freeze over...]

GE is finally accepting they have to pay more attention to the balance sheet than the stock price. Another FIRE economy "law of nature" falls by the wayside....

The ironic part about this is that if they had attended to the balance sheet all along, most likely the stock would be higher today than it is. That the ratings agencies persist in the myth of a triple-A credit rating is a complete joke...

GE Said to Cut Dividend to 10 Cents From 31 Cents


Feb. 27 (Bloomberg) -- General Electric Co. cut its annual dividend for the first time since at least 1940 as Chief Executive Officer Jeffrey Immelt moved to preserve cash and protect the company’s top AAA rating during a global recession, a person familiar with the decision said.

The quarterly dividend was lowered to 10 cents a share from 31 cents for the Fairfield, Connecticut-based company, the person said. The move is intended to save GE, which has paid a dividend for 110 years, about $9 billion a year...

...U.S. companies are reducing dividends at the fastest rate in half a century, hoarding cash and squeezing investors who depend on the payouts more than ever to boost returns. GE’s dividend has been providing a yield of about 14 percent as the shares trade at lows not seen since the mid-1990s...

remember all those guys chasing dividends (schiff?) six months back, wonder how they're all making out :cool:

[Louie.G]

Re: GE Cuts Dividend [Immelt admits hell can freeze over...]

GE will be just fine if they continue as the treat everyone else like they treated me.

I have always paid my GE Card before 27th of the month, the due date. In early Feb they sent me their usual reminder that payment is due on 02/22/2009

I go online to pay it on the 25th and find a $35.00 late payment fee has been added. After checking the monthly email I note the difference in payment day

I have told them to repeal their "GE tax" as it is not my responsibility to bail them out. Doubt I will ever see it though. So that will go down as my contribution towards saving the FIRE economy and it's executive leaders ( oppss sorry for the misspell.... Leeches).

As a side note. Here in NZ a friend of mine runs one of our largest companies. His annual pay is over a mill $ per year. The company is in the crap because of the current crisis. He has suggested taking a voluntary pay adjustment down to 85K per year. Quite a large drop by any measure. Can't see that happening at GE.

[GRG55]

Re: GE Cuts Dividend [Immelt admits hell can freeze over...]

aren't you glad you didn't buy this financial in industrial drag? i wish there were a way to just buy the industrial side of ge's business.

They've decided to follow in Buffett's footsteps and put money into the mid-stream oil and gas business...

GE buys half of Gulf production unit

GE Energy Financial Services, a unit of behemoth conglomerate General Electric, will spend $150 million to buy about half of the ATP Innovator floating oil and gas production unit in deepwater US Gulf of Mexico.


Houston-based ATP Oil & Gas will continue to operate the unit after GE takes its 49% limited partnership stake.

The ATP Innovator processes up to 20,000 barrels of oil per day and 100 million cubic feet per day of natural gas. The unit has been in operation since March 2006 and produces ATP reserves.

The partnership plans to process additional reserves from a third party producer by 2010.

ATP purchased and converted the unit from a drilling semi-submersible rig into a floating production facility in 2005.

Goldman, Sachs & Co. and SMH Capital Inc. acted as financial advisors to ATP in connection with the transaction.

[fightthepower]

Re: GE Cuts Dividend [Immelt admits hell can freeze over...]

How does Immelt still have a job?

[jk]

Re: GE Cuts Dividend [Immelt admits hell can freeze over...]

How does Immelt still have a job?

it was jack welch who pursued the strategy of building up ge capital to be such a huge part of the business. please, credit where credit is due. like greenspan, welch picked a good retirement date, i.e. shortly before the shtf. but of course welch had practice in precision- how else did always beat the estimates by a penny?

[Starving Steve]

Re: GE Cuts Dividend [Immelt admits hell can freeze over...]

I bought GE not too long ago at $31, give or take, and now GE is in the toilet. Exactly the question to ask: "How does Immelt still have a job?"

I bought GE because I like atomic energy, I like turbine production, even wind-mill turbines, I like the effort of GE in hospital technology; mostly, I admire GE as a company which PRODUCES real and useful things.

Obviously, GE getting involved in credit cards and the F.I.R.E nonsense economy of the U.S. was a HUGE mistake. What kind of leadership does this company have? And Immelt, after making mistakes like this, still drawing his huge executive salary, just irritates me to hell.

When one looks at the train-wreck in the world economy, especially the American economy, one has to wonder about the corporate leadership to-day; and why are these failed corporate leaders still around? Witness: the auto companies in Detroit, the biggest banks in the U.S, G.E, etc.

[GRG55]

Re: GE Cuts Dividend [Immelt admits hell can freeze over...]

I bought GE not too long ago at $31, give or take, and now GE is in the toilet. Exactly the question to ask: "How does Immelt still have a job?"

I bought GE because I like atomic energy, I like turbine production, even wind-mill turbines, I like the effort of GE in hospital technology; mostly, I admire GE as a company which PRODUCES real and useful things.

Obviously, GE getting involved in credit cards and the F.I.R.E nonsense economy of the U.S. was a HUGE mistake. What kind of leadership does this company have? And Immelt, after making mistakes like this, still drawing his huge executive salary, just irritates me to hell.

When one looks at the train-wreck in the world economy, especially the American economy, one has to wonder about the corporate leadership to-day; and why are these failed corporate leaders still around? Witness: the auto companies in Detroit, the biggest banks in the U.S, G.E, etc.

1. There was plenty of discussion on iTulip in the past, including an exchange between myself and jk, about companies like GE and GM being "financials in drag". The fact that half of GEs revenues consistently came from financial activities was well known.

2. The part of GE you admire is the part that Immelt has been building up. Immelt has done some admirable things to reorient GE's businesses, including getting a good price from the Saudis for GE Plastics, a heritage business that many other companies would have found difficult to part with [many senior GE executives, including Immelt, came out of Plastics]

3. The part of GE you don't admire is the part that Neutron Jack made GE overdependent on. It was the part of the business where the accounting can be manipulated legally to make sure GE always beat the number by exactly a penny, quarter after quarter after quarter during Welch's reign.

4. If Immelt can be faulted, it is for not cutting the book at GE Capital when he had the chance. That could now prove fatal...

I would love to own most of GE's industrial businesses, but not as long as they are Siamesed with the unrelated financial activities. Maybe this meltdown will cause it to go back to its roots of being an innovative producer of value adding products. No doubt GE founder Thomas Edison would support that direction...

[cjppjc]

Re: GE Cuts Dividend [Immelt admits hell can freeze over...]

it was jack welch who pursued the strategy of building up ge capital to be such a huge part of the business. please, credit where credit is due. like greenspan, welch picked a good retirement date, i.e. shortly before the shtf. but of course welch had practice in precision- how else did always beat the estimates by a penny?

Jack Welch also cooked the books a bit. When GE went to sell their insurance division it was noticed the the division had almost no (Insert accounting word here. Like loan loss provision.) GE had not been properly funding (again insert word.) It added nicely to the bottom line EPS. And made for some nice compensation for Mr. Welch.

[santafe2]

Re: GE Cuts Dividend [Immelt admits hell can freeze over...]

it was jack welch who pursued the strategy of building up ge capital to be such a huge part of the business. please, credit where credit is due. like greenspan, welch picked a good retirement date, i.e. shortly before the shtf. but of course welch had practice in precision- how else did always beat the estimates by a penny?

Thanks for pointing this out. It's Welch that built this time bomb. Immelt is a good CEO and this toxic division is not his child. Many of us remember Welch publicly calling out Immelt for missing his earnings projections but few remember why those earnings were missed. Between Immelt's announcement and the earnings report, Bear Stearns imploded. The leveraged debt icons like Welch will go down in history as carnies, as a vaudeville sideshow. Unfortunately for us, we have to navigate through their waste.

[FRED]

Re: GE Cuts Dividend [Immelt admits hell can freeze over...]

Thanks for pointing this out. It's Welch that built this time bomb. Immelt is a good CEO and this toxic division is not his child. Many of us remember Welch publicly calling out Immelt for missing his earnings projections but few remember why those earnings were missed. Between Immelt's announcement and the earnings report, Bear Stearns imploded. The leveraged debt icons like Welch will go down in history as carnies, as a vaudeville sideshow. Unfortunately for us, we have to navigate through their waste.

See The Big Bet

[santafe2]

Re: GE Cuts Dividend [Immelt admits hell can freeze over...]

See The Big Bet

Too bad for Jack, he may end up standing for the entire meltdown. I'm still betting on Greenspan as the iconic bogeyman, but Welch has a great chance.

[cjppjc]

Re: GE Cuts Dividend [Immelt admits hell can freeze over...]

remember all those guys chasing dividends (schiff?) six months back, wonder how they're all making out :cool:

I'll have Fox on this morning. I wonder if I'll hear; "You need to stick with high quality dividend paying stock in this enviornment."

[goadam1]

Re: GE Cuts Dividend [Immelt admits hell can freeze over...]

It seems you were right that it would take a meltdown to wake some people up about infrastructure. But it seems the corporatist are trying very hard to keep the old ways going (i.e. Santelli's rant).