GE Stock Falls After Company Reports 12% Drop in Revenue
Jul 22, 2017, 00:39
Earnings, adjusted for non-recurring costs and to account for discontinued operations, were 28 cents per share.
The stock fell almost 5% to $25.42 following the announcement, leaving the price around 20% lower than where it started the year.
GE has been under intense pressure to cut expenses and pledged in March to cut $1 billion in annual industrial expenses for each of the next two years, which is twice the level of cuts originally laid out.
GE has cut $670-million in industrial overhead costs this year, Immelt said, and will "meet or exceed" its $1-billion target for 2017 - a goal set after discussion with activist investor Trian Fund Management.
25 cents; down from 51 cents in last year's second quarter.
Revenue fell 12 per cent to $29.56-billion, slightly above the $29.02-billion consensus estimate of analysts polled by Thomson Reuters I/B/E/S. GE said its appliances sale eliminated $3.1-billion of revenue.
The weaker figure in yearly revenue came as weakness in GE's energy connections business offset strength in renewables and power units.
Cash flow in GE's industrial segment was a positive $1.5 billion after a shocking first-quarter shortfall of $1.6 billion.
Chairman and CEO Jeff Immelt said cash flow is expected to increase for the remainder of the year.
GE's net profit slumped 58% to $1.34 billion, or 15 cents a share, in the quarter ended June 30, from $3.30 billion, or 36 cents a share, a year earlier.
"The global scale of the company, along with our ability to innovate industry-leading products and services, will help us navigate the current environment and unlock productivity across our businesses and markets", added Immelt.
The challenges of navigating those markets will fall to John Flannery, a GE veteran whose most recent job was to run the health-care unit, after he takes over from Immelt on August 1. Six-month revenue of $4.5 billion from renewable energy was up 20 percent from previous year. The stock closed down 0.9% on Thursday at $26.69.
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