General Electric Co. (NYSE: GE) added about 3.7% to its share price last week, but only after posting a new 52-week low after reporting third-quarter results Friday morning. The share price increase was not enough — by a long chalk — to pull GE out of its position as the worst performing equity on the Dow Jones Industrial Average index. For the year to date, GE stock has dropped 24.59%.

This is GE’s 14th consecutive week as the Dow’s worst performer. The company still has a big lead over the second worst stock, Exxon Mobil Corp. (NYSE: XOM), now down 7.92%, and third-worst, Verizon Communications Inc. (NYSE: VZ), down 7.21% for the year. Only five of the 30 Dow stocks have traded lower so far this year.

The share price has slumped for weeks, now, but the new low set Friday was the initial reaction to an awful third-quarter earnings report and lowered earnings guidance. But the expected cut to GE’s $0.96 annual dividend (yield of 4.07% at Friday’s closing price) did not materialize. Nearly 200 million shares traded hands Friday, and the stock ended the day up just over 1%.

GE’s valuation has tumbled by 25% for the year to date, a loss of nearly $80 billion in market cap. New CEO John Flannery has moved quickly to reduce costs and promises to shed another $20 billion in assets to make the company leaner. Flannery on Friday added $1 billion to the company’s existing two-year, $2 billion cost-cutting goal.

So far the cuts have been tinkering around the edges, but when Flannery reveals his strategic plan next month, there is little doubt that job cuts will play a significant role in the company’s cost-reduction plans. Something has to give: operating cash flow from GE’s continuing industrial operations, adjusted to exclude deal taxes and pension plan funding, fell from $2.9 billion to $1.7 billion year over year in the quarter.

The math is simple: cash flow has to rise or the dividend has to fall. And when we see how far the share price has dropped while maintaining the dividend, think about how ugly it will get if the dividend is cut.

GE’s shares closed up about 1.1% Friday at $23.83 in a 52-week range of $22.10 to $32.38. The low was set Friday morning. The consensus 12-month price target on the stock is $27.80, but that is likely to fall once analysts have time digest the earnings results. The price target range is $20 to $36.

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