After a complete miss for General Electric’s (NYSE:$GE) third quarter, GE’s new CEO has some serious work to do.
When Friday results were posted, GE’s earnings fell short of many investor’s expectations. Among justifications for the drop were restructuring costs and weak performance in its power, oil, and gas businesses.
Shares sank up to 8% during premarket trading, before recovering slightly before the opening bell. Despite a rocky start, the stock’s daily volume has outpaced its daily average for the past 30 days.
Since CEO John Flannery replaced Jeff Immelt in August, it’s the first earnings report released by the company.
Harbor Advisory’s chief investment officer Jack De Gan said, “It’s a throwaway quarter.”
Despite this, the company still disappointed many investors with the company’s biggest miss in the last 17 years, according to Bespoke Investment Group. Bespoke also noted that the company’s next biggest miss was only 7 cents, back in April 2008.
However, not all the news was bad. GE revenue increased by 14%, coming in at $33.47 billion. This beat analyst expectations of $32.56 billion.
Looking forward, the company cut its future forecasts from $1.60-$1.70 down to $1.05-$1.10 for its 2017 adjusted earnings per share.
Flannery stated, “We are focused on redefining our culture, running out business better, and reducing our complexity. I look forward to meeting with investors in November to update them on our progress.”
In addition to the new CEO, the company has seen a rash of personnel shakeups. This included the early retirement of the company’s chairman, the addition of Trian Partners CIO Ed Garden to the board, and the departure of the company’s CFO.
The push to get Garden on the GE board was to “bring a fresh mindset” according to Trian’s Nelson Peltz. The company is also considering mass cost-cutting measures, causing Peltz to respond by saying that “everything is on the table.”
“Hopefully, the company will start to run the right way and the board will get more active,” he added. According to FactSet, Trian Partners has a $1.6 billion dollar stake in the industrial giant.
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