General Electric set forth a new agenda on Monday as it tries to restructure its way back to stronger growth, with earnings estimates lower than Wall Street forecasts, a reduced dividend and an aggressive corporate restructuring.
The Boston-based 125-year-old industrial conglomerate also said it was cutting the number of seats on its board as part of what its chief executive called "a reset year" in 2018. GE also will be slicing 25 percent of staff from the home office.
Investors recoiled at the news about the dividend and restructuring, sending shares down 7.2 percent Monday in heavy trading. The selling pressure picked up as the trading day went on with the shares down as much as 8.5 percent at one point.
It was the stock's worst single-day decline since April 2009 when the company was still caught in the throes of the housing recession.
"The GE of the future is going to be a more focused industrial company," CEO John Flannery said during his presentation at the company's investor day Monday. "It will leverage a lot of game-changing capabilities."
The event happened amid a plunging share price and as Flannery announced an "extremely painful" halving of the quarterly dividend to 12 cents a share. The restructuring plan said the dividend was set "with a path to grow going forward" but marks the largest cut by an S&P 500 during an nonfinancial crisis year.