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The industrial group reduces its dividend to 1 cent per share.
(Photo: AP)
New YorkSiemens' rival, General Electric, recorded a loss of $ 22.8 billion (20.1 billion euros) in the third quarter, as a result of a write-down in its energy sector, and now clears the dividend almost completely. In the future, investors will receive only one US cent instead of twelve. GE wants to save about $ 3.9 billion a year.
Depreciation is mainly due to the purchase of a large part of Alstom's energy activities. Virtually all of the division's goodwill – the difference between the purchase price and the book value – of $ 23 billion had to be written off, GE said in October.
At the same time, it was revealed that due to the depreciation, the Ministry of Justice and the SEC Securities and Exchange Commission had opened an investigation against the company. By January, GE had amortized $ 6 billion in health care and investigations are under way.
Revenues for the quarter increased from $ 30.7 billion to $ 29.6 billion. New CEO Larry Culp wants to rebuild the energy sector and share two companies.
A traditional company is going through a serious crisis
"Our results are far from having their full potential," Culp said. "The top priority in the first 100 days of my job is getting the company back on track." He took the top post in early October, after the predecessor of the traditional John Flannery company knocked him out – it was already the second boss change within just 14 months.
The stock market was already expecting a loss of $ 1 billion. GE's shares initially traded around 3% in US prior to US transactions. However, when the US authorities' investigations were made public, the securities were declined by a good 3%.
The former flagship GE is currently experiencing one of the worst crises in its 126-year history. In the summer, the stock has even flown since the main Dow Jones stock index, to which it has belonged since 1907. In terms of market value, Siemens has gone beyond the old model.
In 2015, GE took over Alstom's business under the tutelage of its former boss, Jeff Immelt. But soon after, the demand for purchase collapsed around the world. GE is not alone in tackling the power plant business: the market, especially for large gas turbines, has collapsed around the world.
In times of economic prosperity, suppliers had built capacity for 400 turbines a year. According to industrial circles, only 70 to 80 units are currently sold. Mbadive overcapacity has also led to falling prices. Most providers only earn money with this service. For this reason, Siemens had already decided last year to remove more than 6,000 jobs in the division.
Culp now wants to separate the declining gas turbine sector from the rest of the power plant division. He had already made a name for himself as an effective reorganizer of his former position with the US conglomerate Danaher. Initially, the manager did not name new annual targets, although this was reported in early October.
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