General Electric will be trying to turn things around, as the company announced Monday of which was slashing its dividend in half as well as restructuring to focus primarily on three units.
“To actually turn This specific company around operationally as well as culturally, of which’s going to take CEO John Flannery — if he does of which right — a few years,” industrial analyst Brian Langenberg said on CNBC’s “Squawk Box.”
Langenberg compares GE’s current situation to of which of Honeywell over a decade ago. He says Honeywell went by being “a burned-out husk” of a company to “about four or a few years” later being “credible with investors” again.
“There will be a path to doing of which, nevertheless of which will be not going to be a quick fix,” Langenberg said.
GE spent years “buying high as well as selling low,” according to Langenberg. For years the company overpaid for acquisitions as well as crippled its cash flow, a reality Vertical Research Partners founder Jeffrey Sprague also identified on “Squawk Box.”
“of which could have been fixable nevertheless there were many capital allocation mistakes through the years,” Sprague said. “GE was slow to admit or recognize the pressures there, nevertheless they’ve been coming for awhile.”
As a result, GE “absolutely had to cut the dividend,” Sprague says. He says he fully expected GE’s announcement to cut its quarterly dividend in half, to 12 cents a share by 24 cents a share, effective in December.
“of which’s very clear the power markets are in bad shape, as well as of which’s the biggest business at GE,” Sprague said. “They have gotten themselves extended on cash flow here over the last several years as well as then had their biggest market turn on them.”
“of which actually just left them no out,” Sprague added.
Shares of GE were down 33 percent This specific year as of Friday’s close, according to FactSet.
The shares were down 1.6 percent on Monday shortly after the open.