General Electric Surprised Investors with a Profit
Turnover rose five percent to $ 33 billion. GE’s share climbed seven percent even before the stock market launch.
A year ago, $ 11 billion was down in the same place.
In addition, the new CEO Larry Culp wants to lower the debt and has agreed with the judiciary to settle old problems of a banking daughter finally. The US Department of Justice investigation was settled with a $ 1.5 billion fine. “I am encouraged by the changes we are making to make GE stronger,” Culp said in presenting the quarterly figures.
The numbers had been eagerly awaited. After all, Chief Executive Officer Larry Culp did not want to give a fourth-quarter outlook last time.
At the end of October he only lowered the dividend to almost zero. That was a shock to GE investors and a clear sign that the new CEO recognized the reality. GE is now just a shadow of itself. The company, which was worth $ 186 billion on the stock exchange 18 years ago, is today only worth a tenth of it.t
In recent quarterly results, GE has shocked the markets with billions in write-offs and a loss of nearly $ 23 billion.
Culp is already the second new CEO since Jeffrey Immelt had to leave in the summer of 2017. Under Immelt GE had invested heavily and at last the many divisions no longer under control. Immelt’s successor, John Flannery, had attempted to streamline the company.
But because the change was not fast enough for the board, Culp is now at the top. The relies on large-scale cleaning: Culp wrote a total of 22 billion on the energy sector, which had bought a few years ago, large parts of the energy business of Alstom far too expensive.
The problems in the weakening power plant sector continue. Here sales fell by a quarter. The market environment is currently extremely weak. That had last also the competitor Siemens to feel.
Basically, Culp adheres to Flannery’s plan of June: radical simplification also thanks to the sale of the majority stake in the oil services provider Baker Hughes and the separation of health care. But in the operational processes Culp wants to change a lot. He wants to move away from headquarters and the bureaucracy to the operative.