Netizen 24 GBR: GE to focus on three businesses; slashes dividend, profit outlook

GE to focus on three businesses; slashes dividend, profit outlook Discover Thomson ReutersFinancialGovernment SolutionsLegalReuters News Age...

GE to focus on three businesses; slashes dividend, profit outlook

Discover Thomson ReutersFinancialGovernment SolutionsLegalReuters News AgencyRisk Management SolutionsTax & AccountingBlog: Answers OnInnovation @ Thomson ReutersDirectory of sitesLoginContactSupport#Business NewsNovember 13, 2017 / 11:37 AM / a minute agoGE to focus on three businesses; slashes dividend, profit outlook

3 Min Read

(Reuters) - General Electric Co (GE.N) will focus on aviation, power and healthcare, radically shrinking the most famous U.S. conglomerate into a smaller company betting on industries where it has strong technology and a large customer base.

FILE PHOTO: The ticker and logo for General Electric Co. is displayed on a screen at the post where it's traded on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., June 30, 2016. REUTERS/Brendan McDermid/File Photo

In a plan unveiled on Monday by new Chief E xecutive John Flannery, GE cut its dividend and profit outlook in half, sending its stock down 2.7 percent, as Wall Street worried about how the slimmed down company will generate cash to justify its valuation.

“By the numbers, we see a core operating performance that is below plan, and, currently, a consensus expectations curve that we think remains too high,” said JPMorgan analyst Stephen Tusa said.

The stock is the worst performing Dow component this year, down 35 percent through Friday’s close.

The refocusing of the company will likely mean a sweeping sale of $20 billion (£15.2 billion) of assets, but GE did not detail exactly which parts of its business it plans to shed.

The dividend cut, only the third in the company’s 125-year history and the first not in a broader financial crisis, is expected to save about $4 billion in cash annually.

GE forecast adjusted 2018 industrial free cash flow of $6 billion to $7 billion, up from an es timated $3 billion in 2017.

The move to make GE smaller and nimbler is a turnaround from the previous multi-business approach taken by former CEOs Jack Welch and Jeff Immelt.

Flannery’s changes repudiate much of Immelt’s vision of a “digital industrial” company that builds software to manage and optimise GE’s jet engines, power plants, locomotives and other products.

Conglomerates are out of favour on Wall Street, where investors prefer to bet on specific industries rather than a mixed portfolio.

GE forecast 2018 adjusted earnings per share of $1 to $1.07 per share, compared with its earlier estimate of $2 per share. Wall Street was expecting $1.16, according to Thomson Reuters I/B/E/S.

The company on Monday cut its quarterly dividend to 12 cents per share from 24 cents starting in December.

GE’s dividend cut - a bid to save cash when the company’s cash flow is deteriorating - is the third in its history, the other two cuts ca me during the Great Depression and the global financial crisis of 2007-2009.

Flannery’s strategy is a turning point for the company, which over several decades built itself into a sprawling conglomerate with interests across media, energy, banking, aviation, railroads, marine engines and chemicals.

GE executives have said that analysts have undervalued the company’s digital business. They argue the digital units should be valued more like Amazon.com Inc (AMZN.O), Alphabet Inc’s (GOOGL.O) Google and other fast-growing tech companies.

GE will also cut its board to 12 from 18 members.

GRAPHIC-Top five dividend yields in the Dow 30: reut.rs/2zx3aoR

Reporting by Alwyn Scott in New York and Ankit Ajmera in Bengaluru; Writing by Sayantani Ghosh; Editing by Saumyadeb Chakrabarty and Bill Rigby

Our Standards:The Thomson Reuters Trust Principles.0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-table t
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below
Source: Google News

COMMENTS

Name

Accessory,1,Apartment,1,Application,1,Automotive,3,Bank,1,Beauty,2,Board,1,Breakfast,2,Budget Living,1,Building,1,Business,2,Car Accessory,2,Car part,1,Car Shop,1,Celebrity,4,Cloth accessory,1,Cooking,1,Cover,2,Deals,1,Design,3,Digital Life,1,Dinner,1,Dish Review,2,DIY Projects,3,Economy,2,Education,2,Engine,1,Entertainment,1,Expert Advices,2,Fashion,2,Financial,1,Food,3,Football,1,Games,1,Gossip,1,Heath,1,Hotels,1,House,2,Individual,1,Inspiration,2,Latin,1,Lifestyle,6,Live Show,1,Love,1,Lunch,2,Model,1,Music,2,Nutrition,1,Olympic,1,Politics,1,Pop Shop,1,Rock,1,Sports,1,Startup,1,Stock,1,Tech Review,1,Tech Tips,1,Technology,2,Tennis,1,Tone Set,1,Travel,1,Trip Ideas,1,Vogue,1,Weather,1,Wedding,1,World,3,
ltr
item
Netizen 24 United Kingdom: Netizen 24 GBR: GE to focus on three businesses; slashes dividend, profit outlook
Netizen 24 GBR: GE to focus on three businesses; slashes dividend, profit outlook
Netizen 24 United Kingdom
http://www.unitedkingdom.netizen24.com/2017/11/netizen-24-gbr-ge-to-focus-on-three.html
http://www.unitedkingdom.netizen24.com/
http://www.unitedkingdom.netizen24.com/
http://www.unitedkingdom.netizen24.com/2017/11/netizen-24-gbr-ge-to-focus-on-three.html
true
7001244007360372224
UTF-8
Loaded All Posts Not found any posts VIEW ALL Readmore Reply Cancel reply Delete By Home PAGES POSTS View All RECOMMENDED FOR YOU LABEL ARCHIVE SEARCH ALL POSTS Not found any post match with your request Back Home Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sun Mon Tue Wed Thu Fri Sat January February March April May June July August September October November December Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec just now 1 minute ago $$1$$ minutes ago 1 hour ago $$1$$ hours ago Yesterday $$1$$ days ago $$1$$ weeks ago more than 5 weeks ago Followers Follow THIS CONTENT IS PREMIUM Please share to unlock Copy All Code Select All Code All codes were copied to your clipboard Can not copy the codes / texts, please press [CTRL]+[C] (or CMD+C with Mac) to copy