GE Stock Falls After Company Reports 12% Drop in Revenue

Closing Indexes Summary July 21

U.S. industrial giant General Electric reported net profits of $1.34bn for the second quarter of 2017, 53% less than its earnings for the same quarter in 2016. It'll be longtime CEO Jeffrey Immelt's last chance to seal his legacy at the company before stepping down at the end of the month. The cash flow of GE was below expectations and also focused on the stock, as per the Jeff Windau, who is an analyst at Edward Jones. GE also saw its net profit slump 58 percent year over year.

Shares were down 3 per cent at $25.87 in mid-morning trading after earlier hitting a 2-year low.

Corporate Earnings Report July 21
Data courtesy of Trade-Alert

GE today reaffirmed its 2017 forecasts for cash flow, profit, revenue and operating margins, but investors will have to wait for incoming CEO John Flannery to deliver an update on 2018 forecasts later this year.

Mr. Flannery is meeting with investors and visiting the business units of the roughly 300,000-person company.

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Despite re-examining its spending, GE said it won't consider reducing its dividend payout, which Mr. Bornstein called "the single most important capital allocation item that we have".

In the past month, Flannery has begun a "series of deep dives into each of the businesses, looking at everything you would expect", he said Friday. On a GAAP basis, cash flow from operations rose 12% from $2.87 billion a year ago to $3.22 billion. GE posted adjusted earnings of 28 cents per share on $29.56 billion in revenue, compared to the consensus estimates of 25 cent per share on $29.14 billion in revenue.

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Flannery, who´s career with GE spans three decades has latterly been charged with running the company´s healthcare arm. Revenue fell 12% to $29.56 billion, but was above the FactSet consensus of $29.14 billion. During its second quarter, GE cut $593 million in costs and said it was on track to meet its $1 billion savings goal.

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