Image can be found at: http://s.thestreet.com/files/tsc/v2008/photos/contrib/uploads/5fb00d56-e1a7-11e6-a6c9-f527d7434333.png

Has GE Reached the Breaking Point?

October 19, 2017
98 Shares 2,099 Views

GE was once one of America’s greatest companies, but now it looks like it is withering away. The company’s stock has been struggling for some time which has left the it searching for a fix.

Now, CNBC reports:

General Electric’s new CEO, John Flannery, is expected to cut thousands of corporate-level jobs next month as part of a strategic review, The Wall Street Journal reports, citing sources.

The approach is quite similar to Ford’s planned cuts as the company looks to offset poor performance by reducing its payroll.

Read: Ford Announces Major Cuts, But Will They Work?

The issue is that if this plan does not work out, there is little incentive for investors to buy into GE’s stock. The company has relied on a strong dividend to encourage people to purchase shares for some time, but it looks like even that may be subjected to cuts. The Motley Fool writes that:

JP Morgan analyst Stephen Tusa was among the first to call a dividend cut “increasingly likely,” citing the company’s declining earnings.

When a stock is performing as poorly as GE’s has been, (CNBC says the stock is down almost 27% this year) it is imperative for the company to give people some reason to invest. While the cuts may result in long term recovery, a dividend cut coupled with what could be a weak earnings report on Friday would do tremendous damage to the company’s stock.

Investors should look at their portfolio’s and decide whether GE is the right investment for them going forward. The company is in flux at the moment and their fortunes could change change if analysts think this new strategy will work, but if the past is any judge of the future, the odds do not look to be in their favour.

To read CNBC‘s article on GE’s expected cuts, click here.

To read The Motley Fool’s article on GE potentially cutting their dividend, click here.

[grwebform url=”https://app.getresponse.com/view_webform_v2.js?u=BKTzq&webforms_id=14431602″ css=”on” center=”off” center_margin=”200″/]

You may be interested

Job Hiring is Picking Up as Employers and Consumers Gain Confidence
Economy
549 views
Economy
549 views

Job Hiring is Picking Up as Employers and Consumers Gain Confidence

Lamont J - March 29, 2021

The recent government stimulus for small and medium-sized businesses, personal stimulus checks, and declining Coronavirus cases, are all great news…

Fed Could Maintain 0% Interest Rate Until 2024
Economy
489 views
Economy
489 views

Fed Could Maintain 0% Interest Rate Until 2024

Adam R - March 26, 2021

The Federal Reserve is holding its target interest rate in a range of 0.00% - 0.25%, even while the economy…

Supply Constraints Could Slow the Home Market
Economy
555 views
Economy
555 views

Supply Constraints Could Slow the Home Market

Becky H - March 25, 2021

Low inventory has been a constant in the home market for more than a year. The supply of existing and…