GE returning to industrial roots
NEW YORK (AP) — New CEO John Flannery’s ambition to pare away everything that could stand in the way of General Electric’s return to its industrial core became clearer Friday with plans to shed more than $20 billion in operations over the next couple of years.
GE’s third-quarter earnings report shows how much further there is to go before it reaches that goal.
The company drastically cut expectations for the full year after third-quarter profit fell more sharply than expected on large restructuring charges. Flannery called the results unacceptable.
“It’s also clear from our current results that we need to make some major changes with urgency and a depth of purpose,” Flannery said in a conference call Friday.
The shares slid 6 percent in morning trading before recovering by midday.
Flannery led GE’s health care unit until becoming CEO in August, replacing Jeff Immelt, who had reshaped GE after taking over from legendary CEO Jack Welch but couldn’t reverse a slump in the company’s stock while the overall market boomed. GE shares are down 25 percent this year, the worst performer in the Dow Jones industrial average.
Immelt also came under fire for executive perks. GE acknowledged that on occasions an empty plane followed the CEO’s jet on trips, and one of Flannery’s first moves was grounding GE’s fleet of six corporate jets. Flannery has replaced several top executives.
On Friday, Flannery did not mention Immelt by name but said he was focusing on fixing GE’s “culture,” which he said “needs to be driven by mutual candor and intense execution, and the accountability that must come with that.”
P&G tops 1Q profit forecasts
CINCINNATI (AP) — Procter & Gamble Co. (PG) on Friday reported fiscal first-quarter profit of $2.85 billion.
The Cincinnati-based company said it had net income of $1.06 per share. Earnings, adjusted for restructuring costs, were $1.09 per share.
The results topped Wall Street expectations. The average estimate of 11 analysts surveyed by Zacks Investment Research was for earnings of $1.07 per share.
The world’s largest consumer products maker posted revenue of $16.65 billion in the period, matching Street forecasts.
P&G shares have risen roughly 9 percent since the beginning of the year, while the Standard & Poor’s 500 index has risen 14 percent. The stock has climbed 7 percent in the last 12 months.