Securities and Exchange Commission investigates GE's $6.2B insurance business charge

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General Electric shares fell after the company said it will take a $11 billion charge in fourth quarter for tax changes and its insurance portfolio. Aleksandra Michalska reports. Video provided by Reuters Newslook

A federal regulator is investigating General Electric's recently disclosed $6.2 billion insurance business-related charge, the struggling conglomerate disclosed Wednesday as it reported its fourth-quarter earnings.

The Securities and Exchange Commission investigation also focuses on GE's revenue recognition and controls for long-term service agreements, and is in its early stages, Jamie Miller, the company's chief financial officer, told Wall Street analysts during a conference call.

GE is "cooperating fully" with the investigation, she said.

The insurance charge stems from billions of dollars in higher-than-expected costs for coverage of long-term care policies, the company said last week. 

GE also revealed that it would restate its 2016 and 2017 financial results as it adjusts the way its accounting is reported.

The company's shares, which had been up roughly 2% in pre-market trading, gave up much of that gain after the announcements.

The revelations came as GE reported a $9.83 billion loss for the fourth quarter, driven in part by $11 billion in previously announced charges linked to the struggling conglomerate's insurance business and the federal tax overhaul.

The disappointing news included a 15% year-over-year loss for GE's power division and a similar decline in the company's renewable energy unit.

However, the company reiterated its forecast of $1 to $1.07 adjusted earnings per share for 2018, citing strength in GE's healthcare and jet engine businesses. 

GE disclosed the results one week after CEO John Flannery told  Wall Street analysts he and other executives are weighing a potential breakup of the iconic company familiar to generations of Americans for home appliances, healthcare, jet engines and more.

"There will be a GE in the future, but it will look different than it does today," Flannery told Wall Street analysts during a Wednesday conference call on the financial results.

He took on the top job in August as GE launched a corporate turnaround effort focused on its key businesses.

More: GE weighs a breakup of iconic U.S. conglomerate amid insurance problem

Shares of GE, a Dow component, have lost roughly 47% of their value since this time last year.

GE said its quarterly loss amounted to a loss of $1.13 in net earnings per share. The results contrast with the nearly $3.5 billion in earnings, or 39 cents per share, that the company reported for the same three month period last year.

 Excluding non-recurring charges, GE lost $1.23 per share, below the 29 cents per share profit forecast from financial analysts surveyed by FactSet.

The company reported sales of nearly $31.4 billion for the quarter, a 5% decline that missed the nearly $33.9 billion forecast from the financial analysts.

In a statement issued with the financial results, Flannery acknowledged that revenue from GE's power division was down significantly, and said, "we expect market challenges to continue."

However, he pointed to the positive performances by GE's Aviation and healthcare divisions and said the company's cash performance exceeded expectations.

"Our results this quarter demonstrate some of the early progress we are seeing from our key initiatives," said Flannery.

Follow USA TODAY reporter Kevin McCoy on Twitter: @kmccoynyc