General Electric Co.’s new boss promised “sweeping change” as he delivered a brutal assessment of the 125-year-old manufacturer.
Results for the latest quarter are “completely unacceptable,” Chief Executive Officer John Flannery told investors on Friday as he slashed the profit forecast and pledged to unload $20 billion of GE businesses. “We need to make some major changes with urgency and a depth of purpose.”
John Flannery. Photo: Twitter handle (@JohnFlannery_GE)
“Everything is on the table,” Flannery said on a conference call to discuss quarterly earnings. “Things will not stay the same at GE.”
The new CEO, who will detail his plans to reshape the Boston-based company at an investor meeting Nov. 13, is grappling with challenges from poor cash flows to slumping power-generation markets. GE is mired in one of the deepest slides in the company’s history and is the worst performer by far in the Dow Jones Industrial Average this year.
Flannery said he sees a path to recovery — and the comments registered with investors. After falling the most intraday in two years in early trading, the shares began erasing losses during the conference call and eventually turned slightly positive. GE rose 1.1 per cent to close at $23.83 in New York.
“We have fundamentally good franchises,” Flannery said in a telephone interview. “There’s a lot of work to do, but we know what the issues are. They’re fixable.”
Adjusted earnings this year are expected to be $1.05 to $1.10 a share, down from a previous range of $1.60 to $1.70 a share, GE said in a statement. Analysts had anticipated $1.54 a share, according to the average of estimates compiled by Bloomberg.