GE's Power Unit Weighs on Fourth-Quarter Results -- Update
31 Enero 2019 - 06:48AM
Noticias Dow Jones
By Thomas Gryta
General Electric Co. reported another quarter of weak profits,
as poor results in its core power business and legacy problems in
its GE Capital unit continued to weigh on the conglomerate.
The company said Thursday it had agreed to pay $1.5 billion to
settle a long-running investigation by the Justice Department into
a defunct subprime-mortgage business called WMC.
The government was investigating whether the business violated
federal lending laws as part of a larger probe into the subprime
mortgage crisis. The charge was in line with the amount GE had
previously set aside for a potential settlement.)
The fourth-quarter profit attributable to GE was $761 million,
compared with a loss of $10.82 billion a year earlier, when it
booked a large charge for a shortfall in reserves at a defunct GE
Capital insurance business.
Revenue rose 5% to $33.28 billion, including a 25% decline in
power business, which makes turbines for power plants, and a 21%
jump in its aviation business, which manufactures jet engines.
Those are the two biggest units that will be the core of the
company after it moves ahead with plans to break itself apart
following a difficult two years.
Adjusted earnings per share were 17 cents, missing an analyst
projection of 22 cents a share, according to Refinitiv, while
revenue exceeded a consensus view of $32.6 billion.
Larry Culp, who took over as Chief Executive in October, has
continued a plan to break off a number of GE businesses, while
pushing to improve cash flow. He has prioritized shrinking GE's
more than $100 billion in debt.
The first outsider CEO of the conglomerate, he has yet to detail
his strategy or deeper plans. The company didn't provide any
financial projections in Thursday's press release, but Mr. Culp is
holding a conference call at 8 a.m. ET.
To raise cash quickly, Mr. Culp slashed the once reliable
quarterly dividend to a token 1 cent per share, struck a deal to
sell part of GE's stake in Baker Hughes and revamped a deal to sell
the transportation division, which is slated to close next
month.
Mr. Culp must contend with continuing government investigations
into GE's accounting. Both the Justice Department and the
Securities and Exchange Commission are investigating GE's revenue
recognition of service contracts in its power business, a $22
billion charge booked in the third quarter and the process that
uncovered a shortfall in its reserves for a defunct insurance
business.
GE has denied wrongdoing and said it is cooperating with the
investigations.
Write to Thomas Gryta at thomas.gryta@wsj.com
(END) Dow Jones Newswires
January 31, 2019 07:33 ET (12:33 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
General Electric (NYSE:GE)
Gráfica de Acción Histórica
De Feb 2024 a Mar 2024
General Electric (NYSE:GE)
Gráfica de Acción Histórica
De Mar 2023 a Mar 2024