General Electric Makes Progress on Cost-Cutting

22 July, 2017, 00:56 | Author: Delbert Rhodes
  • Closing Indexes Summary July 21

General Electric Co. shored up its cash performance as Jeffrey Immelt tackled one of investors' most pointed concerns in his final days as chief executive officer.

Stock: Shares dipped 0.1% before the opening bell on the stock market today, after rebounding 2.4% last week from a 21-month intraday low on July 10. Mr. Immelt will step down at the end of the month after 16 years and be succeeded by health-care unit chief John Flannery. He is set to be replaced as CEO by John Flannery on August 1.

Winners and Losers: Shares of General Electric sunk almost 3 percent after posting a decline in second-quarter profit.

"It's discouraging that we're going to wait again for the company to perform as we wait for the new CEO to review everything", said Jim Corridore, analyst at research firm CFRA, which cut GE shares to "hold" after Friday's results. But, its energy connections and lighting unit reported a 27 percent dip to $3.2 billion in revenue, weighing down the overall results.

Exxon Mobil was down 0.5% while Chevron shares fell 1.2%.

Both GE and Honeywell are facing pressure from activist investors. Third Point LLC has called on Honeywell to explore selling or splitting off its aerospace business. It has eliminated $670 million in spending so far this year.

Immelt sold off NBCUniversal, appliances and most of GE Capital.

Corporate Earnings Report July 21
Data courtesy of Trade-Alert

Cash flow in GE's industrial segment was a positive $1.5 billion after a shocking first-quarter shortfall of $1.6 billion.

That was about $1 billion worse than the company had anticipated.

In last year's second quarter.

Net profit slumped 58 percent 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.

Revenue was also lower than in the year-ago period, falling 12% from $33.49bn to $29.558bn.

Imani Moise contributed to this article.

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