General Electric Co. said its quarterly earnings fell as it incurred hefty restructuring charges during Chief Executive John Flannery's first official quarter at the helm, and the new CEO pledged to exit more than $20 billion of the company's businesses.
GE reported a third-quarter profit of $1.8 billion, or 21 cents a share, down from $2 billion, or 22 cents a share a year earlier. Excluding costly restructuring charges and other items, adjusted per-share earnings fell to 29 cents from 32 cents. Impairments and restructuring charges during the period dented GE's per-share earnings by 16 cents.
The maker of jet engines, power turbines and locomotives said it is looking to streamline its portfolio by more than $20 billion in the next 1 to 2 years. The company also forecast adjusted earnings for the full year that were significantly below the previous target.
GE shares dropped 5% premarket Friday after closing Thursday at $23.58. The company's stock has fallen 25% this year.
Since Mr. Flannery took over 2 1/2 months ago, he has begun implementing his ideas to cut costs at the company and review a far-reaching portfolio of business. The company said it cut $500 million in annual costs in the latest quarter, and $1.2 billion year to date, as it seeks to cut more than $2 billion over two years.
But Mr. Flannery has guarded the details, many of which likely won't come until Nov. 13, when he is slated to release updated financial targets and lay out his vision. It is likely to include cutting thousands of jobs and scaling back GE's structure.
"We are focused on redefining our culture, running our businesses better, and reducing our complexity," Mr. Flannery said in prepared remarks Friday.
He has already called on company leaders to review their divisions. He also wants to streamline the company's global research efforts, which could include shutting down research centers in Shanghai, Munich and Rio de Janeiro.
Mr. Flannery, a GE lifer who has made it clear he is open to change, has also grounded a fleet of six corporate jets often used by his predecessor.
GE's revenue jumped 14% to $33.5 billion in its third quarter, up from $29.3 billion a year earlier. Analysts had expected revenue of $32.56 billion, boosted by a merger of GE's oil-and-gas unit with Baker Hughes.
Oil-and-gas revenue rose 81% from a year ago. Revenue growth was mixed with aviation and health care businesses expanding, but power, lighting and transportation all shrinking. Transportation revenues dropped 14%.
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(END) Dow Jones Newswires
October 20, 2017 07:35 ET (11:35 GMT)