GE shares fall as profit slumps, investors await new CEO's targets

Mandy Carr
July 22, 2017

GE's earnings report will be the last for outgoing CEO Jeff Immelt, who had been criticised by numerous company's shareholders. But the Boston-based conglomerate tempered profit expectations for the current year and said investors would have to wait until mid-November for Mr. Immelt's successor to discuss the outlook for 2018. That marks the lowest level for the stock since October 2015, when it bottomed at $24.79.

In June, GE announced that Immelt would step down as CEO on August 1, to be replaced by longtime executive John Flannery.

Mr. Flannery is meeting with investors and visiting the business units of the roughly 300,000-person company.

"I'm not anxious about internal paralysis", Flannery told analysts and investors during the Boston-based company's quarterly earnings call on Friday, June 21. "I don't think asking for four or five months to do this is asking a lot".

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Winners and Losers: Shares of General Electric sunk almost 3 percent after posting a decline in second-quarter profit. CFO Jeffrey Bornstein sees FY 2017 EPS trending toward the lower-end of its previously stated $1.60-$1.70 range.

Revenues in the company's power segment rose 5% to $6.97 billion and aviation segment sales were flat at $6.53 billon.

CFRA analyst Jim Corridore throws in the towel, downgrading shares to Hold from Buy, cutting his price target to $27 from $36 as well as his 2018 EPS estimate to $1.80 from a previous forecast of $1.85. GE also saw its net profit slump 58 percent year over year. Third Point LLC has called on Honeywell to explore selling or splitting off its aerospace business.

"We've reduced our Industrial structural costs year to date by $670 million and we are on track to meet or exceed our $1 billion cost reduction target for the year", Chairman and CEO Jeff Immelt said in an earnings release.

Other reports by Guamnewswatch

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