GE Earnings Fall as New Leadership Picks Up Restructuring Work
October 20 2017 - 7:39AM
Dow Jones News
By Cara Lombardo
General Electric Co. said its third-quarter earnings fell as it
incurred hefty restructuring charges during Chief Executive John
Flannery's first official quarter at the helm, and the new CEO
outlined plans to exit more than $20 billion of the company's
businesses.
GE reported a third-quarter profit of $1.8 billion, or 21 cents
a share, down from $2 billion, or 22 cents a share a year earlier.
Excluding costly restructuring charges and other items, adjusted
per-share earnings fell to 29 cents from 32 cents. Impairments and
restructuring charges during the period dented GE's per-share
earnings by 16 cents.
GE said it is looking to streamline its portfolio of businesses
by more than $20 billion in the next one to two years. The company
also forecast adjusted earnings for the full year that were
significantly below the previous target.
GE shares dropped 5% premarket Friday after closing Thursday at
$23.58. The company's stock has fallen 25% this year.
Since Mr. Flannery took over two months ago, he has begun
implementing his ideas to cut costs at the company and review a
far-reaching portfolio of business.
Mr. Flannery is slated to release updated financial targets and
lay out his vision Nov. 13. It is likely to include cutting
thousands of jobs and scaling back GE's structure.
"We are focused on redefining our culture, running our
businesses better, and reducing our complexity," Mr. Flannery said
in prepared remarks Friday.
He also wants to streamline the company's global research
efforts, which could include shutting down research centers in
Shanghai, Munich and Rio de Janeiro.
Mr. Flannery, a GE lifer who has made it clear he is open to
change, has also grounded a fleet of six corporate jets often used
by his predecessor.
GE's revenue jumped 14% to $33.5 billion in its third quarter,
up from $29.3 billion a year earlier. Analysts had expected revenue
of $32.56 billion, boosted by a merger of GE's oil-and-gas unit
with Baker Hughes.
Oil-and-gas revenue rose 81% from a year ago. All segments saw
growth other than power, lighting and transportation.
Transportation revenues dropped 14%.
Write to Cara Lombardo at cara.lombardo@wsj.com
(END) Dow Jones Newswires
October 20, 2017 07:24 ET (11:24 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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