In a move that has been speculated about for quite some time, General Electric (GE) finally cut their dividend by 21 cents.  CNBC’s brought the breaking news,

“… GE will ultimately of course reduce the payment of the dividend to 40 cents a year. Again, GE to cut its dividends from 31 cents a quarter to 10 cents a quarter, saving the company as much as $9 billion annually. Some, of course, expected that GE might cut dividends completely. The company previously, as you know very well, Sue, committed on a number of occasions to maintaining that …Again, GE recently transferred or moved a good deal of money to GE capital, strengthening its equity capital position. Nonetheless, it will be another thing that increases the ability of the company to maintain cash and sustain potential losses that may or may not be taking place at GE capital as it has to mark down things.”

As much as CEO Jeffery Immelt did not want to cut the dividend, in the end his hands were tied.  As we wrote in Stock Soars on Hint of Dividend Cut, Huh?, it would have been far more detrimental to shareholders if the company lost its triple-A credit rating in order to maintain its hefty dividend.  However, in contrast to that speculation of a dividend cut when the stock spiked up, this time the actual dividend cut has been met with dismay by the market as GE is selling off nearly 5%, and has set a new 52-week low at $8.40.  These are certainly very tough times at GE and Immelt continues to raise doubts about whether he is really able to right the ship.