GE Shows Long Road Ahead in Restructuring Push
January 24 2018 - 8:12AM
Dow Jones News
By Allison Prang
General Electric Co. reported a loss in its latest quarter as
the struggling industrial giant zeroes in on restructuring plans
under its new chief executive.
Chief Executive John Flannery took over GE in August of last
year and is working on restructuring the company, which could
involve dividing the company up. Mr. Flannery wants to focus on
power, aviation and health care.
On Wednesday GE reported more weakness in its power and
transportation divisions, with revenue and operating profit
plunging from a year ago.
In prepared remarks Wednesday, Mr. Flannery said "we expect
market challenges to continue" for the power division.
The company reported a loss of $9.64 billion, or $1.13 a share,
down from a profit of $3.67 billion, or 39 cents a share, in the
same period the year before. On an adjusted basis, GE reported a
loss of 27 cents a share, down from 46 cents a share. Analysts
polled by Thomson Reuters were expecting adjusted earnings of 29
cents a share.
Changes from the new U.S. tax law hurt the company's earnings by
40 cents a share.
In premarket trading Wednesday, shares rose 2.1%. In the last 12
months, they have fallen 44%.
Mr. Flannery has already started some of the turnaround work.
Last year, GE cut its annual earnings guidance along with its
dividend.
Revenue at GE fell 5.1% to $31.4 billion.
Revenue from oil and gas rose 69%, as the sector's adjusted
profit fell 25%. GE finished merging Baker Hughes and its own oil
and gas division last summer.
Revenue for the company's power sector fell 15% and operating
profit fell 88% from a year ago.
Meanwhile, GE saw higher operating profit and revenue from its
aviation and health-care divisions.
Write to Allison Prang at allison.prang@wsj.com
(END) Dow Jones Newswires
January 24, 2018 07:57 ET (12:57 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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