GE Shares Reverse Course On Conflicting Dividend Reports

General Electric Company (NYSE: GE) recovered half its Wednesday losses by midday Thursday. The stock's move was catalyzed in part by executive remarks casting uncertainty on the future of dividends.

CEO John Flannery told analysts at a conference Wednesday that management will have to monitor GE’s turnaround progress and cash flow opportunity before deciding whether to reduce its dividend again. The stock sold off 7.7 percent.

Investors tentatively returned, though, in spite of continued ambiguity.

Early Tuesday, CNBC cited sources claiming that GE had no plans to cut its dividend in 2019. However, Fox Business Network soon published conflicting reports and said a GE spokesperson “would not deny that [the] dividend could be cut more.”

SCOOP: A senior @generalelectric official tells @FoxBusiness that CEO Flannery signaled yesterday that the dividend is "on the table" if cash flow doesnt improve; confirms FBN's story from monday. spokeswoman would not deny that dividend could be cut more 130 @TeamCavuto

— Charles Gasparino (@CGasparino) May 24, 2018

If the dividend is indeed dependent on indicated performance metrics, it appears insecure. Flannery said Wednesday he is not expecting any profit growth in GE’s power unit this year, which could bode poorly for the company’s finances. Deterioration in that particular segment inspired Moody’s recently issued negative outlook on GE credit this year.

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