General Electric reveals deeper regulatory probe, restructuring

(Reuters) – General Electric Co (GE.Nhis chief executive officer Larry Culp took over his position as chief executive officer.

GE said the U.S. Securities and Exchange Commission and Department of Justice had a $ 22-billion writedown of GE's power division, which GE reported on Tuesday.

GE is one of the most important companies in the world, with more than $ 40 billion in annual sales, among the largest in the world. such actions in US corporate history.

Culp, who took over on Oct. 1, delivered more bad news on Tuesday: GE will significantly miss its full-year cash flow target of about $ 6 billion, and can not estimate profits for the year .

GE all but eliminated its quarterly dividend of 12 cents to share $ 3.9 trillion in cash. Analysts viewed that positively, and Culp said there were no plans to raise equity capital, as some analysts had feared.

"My priorities in my first 100 days are positioning our businesses to win, starting with Power, and accelerating deleveraging," Culp said in the statement.

NEW POWER STRUCTURE

Former CEO John Flannery, who was on the job for just 14 months, said in his view that it would be easier to get the job done. works.

Culp added on Tuesday, March 24th, 2010, Author: admin, Title: energetic, energetic, energetic, energetic, ethanol.

GE took on much of that capability in 2015 with a $ 10-billion acquisition of power assets from Alstom SA (ALSO.PA). It argued it could boost margins and profits. But profits fell as demand for fossil power plants slowed down in response to cheaper solar and wind systems. Power services faced stiff competition in Saudi Arabia and elsewhere, and the use of large power plants has declined, slowing repair revenue.

GE wrote down $ 22 billion in goodwill because the promised profits are unlikely.

"They are acknowledging that it is not going to turn around in a hurry," said Paul Healy, a professor at the Harvard Business School who focuses on corporate financial reporting.

Largely as a result, GE reported a loss of $ 22.8 billion for the third quarter on Tuesday. The power business lost $ 631 million in the quarter.

Overall, we posted a loss of $ 2.63 a share, compared with 16 cents a year ago, we have 4-percent revenue decline to $ 29.6 billion. Adjusted earnings were 14 cents to share, down from 21 cents a year ago. Analysts had expected 20 cents to share, according to Refinitiv data.

Orders at the power division fell 18 percent and revenue fell 33 percent in the quarter. "The only way out of this mess is to restructure power," said Scott Davis, analyst at Melius Research in New York. "It will bottom eventually."

GE did not cut its earnings for the most recent $ 1.00 to $ 1.07 per share, as some had expected. Analysts have cut estimates for earnings to 88 cents a share, on average, according to Refinitiv data. A spokeswoman said GE would not hit the old targets, but was just providing new ones just yet.

"I just do not think Larry has his hands around this fully yet," Davis said.

GE shares are down 3.7 percent at $ 10.75. They had initially gained after their results.

Credit agencies have since cut GE's ratings, its debt costs, and its financial challenges, which have prompted it to issue to capital stock, limit the funds GE has to cut its power division, according to analysts.