General Electric falls after delaying third quarter results

General Electric Co. (GE) canceled pre-market gains on Friday, October 12. Management reacted by publishing its third quarter financial results and analysts questioned the financial situation of the troubled industrial conglomerate, suggesting an increase in equity and a reduction in the dividend.

The Boston-based company has announced it will report the third quarter results on Tuesday, October 30, before the opening bell. GE was to release its results on October 25th.

"The company has appealed to allow GE President and CEO Larry Culp to complete the initial business assessments and site visits following his appointment on October 1," said GE. a statement. "Culp will share his first observations, with more details expected in early 2019."

According to FactSet, GE is expected to record a profit of 21 cents per share on a turnover of $ 29.6 billion.

GE's shares fell about 0.9% to $ 12.60 at 9:40 am New York time. The stock had increased by almost 1.8% in pre-market trade.

At the same time, analysts suggest that the newly appointed CEO must take important steps to preserve GE's financial position.

"We believe that new CEO, Larry Culp, will work to reduce the balance sheet gap by combining a steeper dividend cut (> 90%) and possibly a single capital increase to add some security to the future investment, seems simple, "commented Steven Winoker, an analyst at UBS, in a research note published on October 11.

Winoker noted that GE Capital continues to weigh on the company, as "the consolidated net debt stands at $ 51 billion, but contingent liabilities swell this figure by about $ 27 billion more" . In total, the UBS analyst estimates about $ 97 billion worth of net bonds.

UBS evaluates GE at Neutral with a price target of $ 13.

Credit Suisse, which began trading on October 11 with a neutral rating and a price target of $ 14, said GE faced risks, including "a continuing deterioration in the energy markets, a slowdown in growth of the secondary market of the aviation, a reduction of the dividend more important than expected, volatility due to the lack of information and additional demotions of credit ".

Earlier this month, credit ratings giant Moody's Investors Service revised its A2 credit rating for possible revision.

"Among the issues being examined by Moody's, there is the impact of the ongoing deterioration of its Energy business on GE's earnings and cash flow outlook, which is expected to persist for a period of time," he said. Moody & # 39; s. "GE Power's weaker outlook is becoming increasingly important given the loss of free cash flow following GE's planned divestitures, including GE Generation and GE Healthcare."

"The review will also assess other measures likely to improve GE's free cash flow relative to the balance of its debt," added Moody's. "These could include measures to reduce the very substantial pension deficit, GE's $ 4.2 billion annual dividend, improved working capital or the efficiency of investments." Potential for disruption or acceleration of efficiency programs already underway with another change in management will be assessed. "

According to Bloomberg data, there are eight purchases, 12 catches and three sale ratings.