GE Just Slashed Dividends By 50% in the First Cut Since the Financial Crisis

In a rare move, General Electric announced Monday that it plans to cut its quarterly dividend by half, from 24 cents a share to 12 cents a share. It marks the company’s first dividend cut since the financial crisis.

“We understand the importance of this decision to our shareowners and we have not made it lightly,” General Electric CEO John Flannery said in a statement. “We are acting with urgency to make GE simpler and stronger to drive growth and create more value for our shareowners.”

GE last made cuts to its dividend payout in 2009. It also made a cut in the midst of the Great Depression.

Many companies today are increasing their dividend payouts amid a strong stock market and stable economy. But investors have suspected a dividend cut was on the horizon after General Electric’s third quarter earnings missed the mark. The company trimmed its full-year guidance, another grim sign.

Before the cut, GE required about $ 8 billion to pay its annual dividends. But earlier this year, analysts, including those from Deutsche Bank, pointed out that GE’s estimated 2017 free cash flow allocated to dividends, about $ 7.7 billion, fell short of the mark. Given GE’s lower full-year estimates, the company is now likely to have even less funding available for dividends, hence the cut.

General Electric’s stock rose about 1% in pre-market trading Monday.

Flannery is expected to give more details about the dividend cut during GE’s investor day Monday.