Updated from 1:18 p.m. EDT
Trying to understand
CEO Jeff Immelt on the likelihood of further cuts to the company's dividend is getting to be almost as difficult as reading the company's massive balance sheet.
In initial comments during a company presentation Tuesday, Immelt left some question about whether the company might lower its dividend below the 10 cents a share it dropped it to earlier this year. The payout previously was 31 cents. Goldman Sachs analyst Terry Darling asked Immelt to explain himself.
"Let me just try, Terry, I think the dividend we've got today is safe," Immelt said, according to a
transcript of the conference. Immelt pointed out the company raised $15 billion in equity last fall, in addition to saving capital through the cut.
Darling pressed the question, however, asking about GE's appetite for a dividend cut vs. other measures to preserve capital, such as asset sales.
"We want to continue to sell assets. We really do," Immelt said.
Selling assets, however, is far from a slam dunk, especially in the current environment, where it is difficult for buyers to obtain financing.
analyst Nick Heymann told
in an email message that he is not worried about a dividend cut near-term, but if writedowns in GE's financial unit do not peak until 2010, "that would theoretically be a big challenge." Heymann estimates, however, that the losses will peak early next year.
A GE spokeswoman declined to elaborate on Immelt's comments.
GE cut its dividend in February, roughly a month after Immelt said the company planned to maintain it. That prompted an investor
The dividend cut was GE's first since 1938. Immelt told
Wednesday that making the cut was "the toughest decision
he ever had to make as CEO."
GE shares were up 1.2% to $13.87 per share Wednesday afternoon, apparently on positive sentiment surrounding other comments made by Immelt in public appearances Tuesday and Wednesday.
GE typically trades in sync with large financial companies like
, which were all down by more than 2%.
Bank of America
shares, however, were up as a $13.5 billion sale eased capital concerns.
"There was a distinctly more positive tone around GE Capital with stabilization in business trends and strong margins on new commercial finance business," read a note from Deutsche Bank analyst Nigel Coe.
Sterne Agee's Heymann maintained his sell rating but raised his target price by a dollar to $9.