PITTSBURGH (AP) _ Cash-strapped Westinghouse Electric Corp. cut its 35-cent quarterly dividend nearly in half Wednesday, marking the first time the company has reduced its dividend in at least 50 years.

Westinghouse's board of directors reduced the dividend to 18 cents a share, payable March 1 on 340 million outstanding shares. The move will save nearly $58 million per quarter.

A review of company records dating back to 1935 found no dividend cuts, said company spokesman Jay McCaffrey. Earlier records were not immediately available.

The board also authorized issuing about $500 million worth of preferred equity redemption cumulative stock. The preferred stock, which will provide a higher dividend, will convert to common stock after three years.

''We are determined to take every appropriate and financially prudent step to strengthen the balance sheet by reducing debt and building equity,'' said Westinghouse Chairman Paul E. Lego. ''The dividend reduction provides capital and reduces the level of new equity required.''

The company took a $1.68 billion charge in the third quarter of 1991 for deteriorating real estate loans made by its troubled credit unit and laid off 4,000 workers to cut costs.

Westinghouse said in July it had sold about $700 million in assets from the credit unit and planned to sell about $500 million in assets during the first quarter of this year.

Shortly before Christmas, the company completed arrangements for a $6 billion line of credit from its banks.

The company needed to raise more capital, and the dividend cut and stock offering may have been the least costly alternative, said Gregory Drahuschak, an analyst with Wheat First Butcher & Singer in Pittsburgh.

''At least they're facing the stark light of reality and doing what they need to do to address the problems,'' he said. ''Anybody looking for a short- term fix is going to be disappointed.''

Some investors may sell their common stock and buy the new issue, pushing the price of common stock down, Drahuschak said.

Westinghouse reported fourth-quarter net income of $171 million, or 51 cents a share, compared with a loss of $449 million, or $1.53 a share, in the same period a year ago.

The 1990 fourth-quarter results included a $975 million provision for loan losses in the company's credit unit.

Westinghouse was founded in 1886. Its businesses range from defense to television and radio broadcasting.