Monday, 12 November, 2018

GE, seeking path forward as a century-old company, ousts CEO

General Electric CEO John Flannery is seen at the company’s office in New York City General Electric CEO John Flannery is seen at the company’s office in New York City U.S
Nellie Chapman | 01 October, 2018, 23:13

General Electric, one of America's most important companies, has shocked Wall Street by replacing John Flannery, its chairman and chief executive, after just over a year in the job.

In a statement, Culp called his new position a "privilege" and said that he plans to "move with urgency" to address the company's woes.

The company also said its power business had weaker-than-expected results and that its free cash flow and per-share earnings will fall short of its previous guidance for the year.

With a market capitalization below $100 billion as of Friday, GE was worth less than a fifth of its peak value a generation ago.

The shares climbed 8.2 percent to $12.22 in NY premarket trading Monday. Company shares are on pace for their largest single-day percentage increase since March 2009.

GE has been hobbled by years of poorly timed deals and needless complexity.

Some analysts said GE Power likely missed financial targets for the third quarter, contributing to Flannery's ouster. GE is hoping he will continue the process of shedding non-performing assets and deleveraging the company's balance sheet.

GE is scheduled to report earnings October 25th before the market opens.

Culp joined the GE board in April.

GE doubled down on fossil fuels in 2015 under Immelt with the $10.3-billion purchase of French group Alstom SA's (ALSO.PA) power business. GE will need to take a goodwill impairment charge of almost all the $23 billion in its goodwill balance, according to the company.

Flannery faced a titanic task in redirecting General Electric, which was founded in 1892 in Schenectady, New York.

Also in June, GE lost its spot in the blue-chip Dow Jones Industrial Average .DJI after over a century.

"We have a lot of work ahead of us to unlock the value of GE".

A goodwill impairment charge is a write-off used to balance a company's books when the recorded value of an asset or liability is determined to be greater than the fair value, according to Investopedia.