General Electric reports 3Q loss of $22.8 bn, cuts dividend
NEW YORK, Oct 30, 2018 (BSS/AFP) – General Electric reported a third-quarter
loss of $22.8 billion Tuesday following a large asset write-down and cut most
of its dividend as it seeks a turn-around under a new chief executive.
The loss compares with profits of $1.3 billion in the year-ago period and
is due to a $22 billion write-down announced when GE tapped H. Lawrence Culp
as chief executive earlier this month. GE slashed its quarterly dividend from
12 cents to a penny.
Revenues fell 3.6 percent $29.6 billion.
The slumping power business also reported lower revenues compared with the
But revenues were higher in most of GE’s other segments, including aviation
and health care, two segments that have held up well in recent years.
Revenues also increased in oil and gas, a division that had sputtered until
Culp, addressing investors for the first time during an earnings conference
call, said GE continues to enjoy strong talent and technology assets, but
that the company needs to pivot.
“We need to focus more on customers and competition and frankly less on
corporate,” he said, adding that he would emphasize strong daily management
GE’s big problem continues to be the power division, which has been beset
by overcapacity due in part to the growth of renewable energy sources that
has dented demand for GE’s turbines.
GE has described the weak market conditions in power as a multi-year issue
and signaled again Tuesday that demand remained weak.
Adding to those woes in September was a technical glitch that temporarily
shuttered new plants installed in Texas. Worries about the problem sent
shares to multi-year lows that only began to turn around when GE announced
Culp’s appointment on October 1.
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GE, under former CEO John Flannery, eliminated more than 12,000 jobs,
replaced top executives and sold some assets.
Flannery’s replacement, Culp, signaled more change ahead for the troubled
power division, announcing plans to split power into two units, one focusing
on gas and industrial services and the other comprising steam, grid
solutions, nuclear and power conversion.
GE must “materially” change its power organization, Culp said. “It has
become clear to us that we must simplify power.”
Culp previously led industrial and healthcare conglomerate Danaher. Some
analysts welcomed the appointment of a company outsider and shares have held
up since his appointment, even as the broader stock market has retreated
during a weak October.
Shares of GE fell 1.4 percent to $10.93 in pre-market trading.