Many analysts expect General Electric (GE) to exceed their earnings guidance when they release their third quarter earnings report on Oct. 20, as they did in eight of the last nine quarters. However, the stock price is also expected to decline as it did over the last seven quarters after the results were released.
Fears of a reduction in dividends have eased since last week – which would have led to an exodus of investors and a significant drop in the value of shares – but it seems that much work remains to be done for the CEO recently named, John Flannery, who oversees the restructuring and reorganization efforts.
"A reduction in dividends could crush stocks when retail investors flee, but maintaining it gives GE little or no excess cash," said Jeffrey Sprague, an analyst at Vertical Research Partners last week. "GE continued to reduce the company, but did not proportionally reduce its dividend."
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