By Cara Lombardo and Thomas Gryta

General Electric Co. said it would cut its dividend by half, as the 125-year-old industrial conglomerate seeks to preserve cash for a restructuring under new Chief Executive John Flannery.

The new quarterly dividend will be 12 cents per share, down from 24 cents a share. The change will be effective the next time a dividend is declared, which is expected to be in December.

The industrial giant is one of the biggest dividend payers in the U.S., doling out about $8 billion a year. But it has struggled to generate profits and cash flow from its industrial operations in recent years to cover the payout. Several analysts said they were expecting a potential reduction today when Mr. Flannery shared his turnaround strategy with investors.

"We understand the importance of this decision to our shareowners and we have not made it lightly," Mr. Flannery said in prepared remarks. "We are focused on driving total shareholder return and believe this is the right decision to align our dividend payout to cash flow generation."

The company has paid a dividend since 1899 and last cut it in 2009, when it reduced the payout by $9 billion. Mr. Flannery said the latest dividend change is part of his push to make GE "simpler and stronger."

The company is set to hold an investor update Monday morning where Mr. Flannery is expected to unveil his plans for the company that will focus on three of its biggest business lines but stop short of a breakup or radical restructuring.

GE shares, down 35% this year, slid about 1.7% premarket.

When he was named CEO in June, Mr. Flannery said the dividend was safe but recently warned that his thinking had evolved during his portfolio review. Former CEO Jeff Immelt referred to cutting the dividend as the worst day of his tenure, coming just weeks after he reassured investors about sustaining the payout.

On Friday, analyst Jeff Sprague at Vertical Research Partners analyst said GE's industrial businesses haven't covered the cost of the dividend for five years but relied on the mostly gone financial services business to help close the gap.

Write to Cara Lombardo at cara.lombardo@wsj.com and Thomas Gryta at thomas.gryta@wsj.com

(END) Dow Jones Newswires

November 13, 2017 07:39 ET (12:39 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.
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