SFL Corp (NYSE:SFL) saw its stock price plummet 5.81% in pre-market trading on Tuesday, following the release of its second-quarter 2025 financial results. The sharp decline comes despite the company beating analyst expectations for both earnings and revenue, as investors reacted negatively to a significant cut in the quarterly dividend.

SFL reported quarterly earnings of $0.01 per share, surpassing the analyst consensus estimate of a $0.01 loss. The company's revenue for the quarter came in at $192.588 million, exceeding the projected $186.200 million. However, the positive financial results were overshadowed by the announcement of a reduced quarterly dividend of $0.20 per share, down from $0.27 in the previous quarter.

The dividend cut appears to be a result of the company's recent strategic moves and market challenges. SFL has been actively renewing its fleet by selling older vessels, which has increased available capital for new investments but reduced near-term cash flow. Additionally, the company faces headwinds in its drilling rig business due to market uncertainty and oil price volatility. These factors have likely contributed to the decision to lower the dividend, causing concern among income-focused investors and leading to the pre-market stock price decline.