NEW YORK (Reuters) - General Electric Co GE.N cannot guarantee its 2019 dividend and is still fixing its power and capital units, Chief Executive John Flannery said on Wednesday, sending the industrial conglomerate's stock down nearly 8 percent.

FILE PHOTO: General Electric Chief Executive Officer John Flannery presents the company's new strategy and financial targets to investors at a meeting in New York, U.S., November 13, 2017. REUTERS/Alwyn Scott/File Photo

Faced with weak profits and calls to be broken up, the 126-year-old company is aggressively cutting costs, selling businesses and trying to strengthen its balance sheet under new managers and a new board.

Asked by an analyst if the 2019 dividend was assured, Flannery said that while payout is important to investors, it depended on multiple factors.

“It’s ultimately a function of the free cash flow of the company and that’s ultimately a function of operating performance and things that we do with the portfolio,” Flannery told analysts at the annual Electrical Products Group conference in Florida.

GE's decision to merge its transportation business with rail equipment maker Wabtec Corp WAB.N, announced on Monday, was among the changes that could affect the dividend, he said.

“We have to see how this plays out,” he said,

Analysts read this as a sign that GE is likely to reduce its dividend, which is 48 cents a share.

“The primary takeaway is the dividend will be cut as assets are sold,” said Jeff Sprague, an analyst at Vertical Research Partners.

“Proceeds from sales have to go to debt reduction. Cash flow from assets sold is obviously gone making dividend unsustainable.”

GE shares tumbled 7.7 percent to $14.11 in afternoon trading, putting them on track for the biggest daily percentage decline since Flannery became CEO last August. The stock’s previous record drop under Flannery was 7.2 percent on Nov. 13, when he gave his first major update as CEO.

Former CEO Jeff Immelt, speaking a year ago at the same conference Flannery addressed on Wednesday, said there was a “mismatch” between GE’s value and the performance of the company, and that the stock should climb.

Instead, GE’s shares have fallen 47 percent in the past year as profit deteriorated at its power business and GE revealed unexpected liabilities in its GE Capital unit.

Since early April the stock climbed 20 percent as analysts reassessed the company’s prospects now that it has installed a new board and begun making the promised asset sales.

But that view appeared to be undercut by Flannery’s remarks on Wednesday. He said he expects no profit growth at its large power business this year, and is planning for the power market to remain weak through 2020. Profit at the unit tumbled 53 percent last year to $1.9 billion.

He affirmed GE's targets for 2018 profit and free cash flow, and said profit at GE's Baker Hughes BHGE.N oil and gas unit would rise by 50 percent or more this year, while profit at the aviation business would be up 15 percent.

But a number of issues cloud GE’s outlook. Investors are concerned about any potential liabilities at GE Capital’s finance arm.

GE took a $6.2 billion charge in the fourth quarter for re-evaluation of insurance assets, and sources said on Tuesday that the company is working with investment bankers to find ways to shed its insurance business.