General Electric reveals deeper regulatory probe, restructuring

[Eugene]

Source: Reuters

BUSINESS NEWS OCTOBER 30, 2018 / 6:45 AM / UPDATED AN HOUR AGO

General Electric reveals deeper regulatory probe, restructuring

Alwyn Scott, Rachit Vats
5 MIN READ

(Reuters) - General Electric Co (GE.N) slashed its quarterly dividend to a penny a share, said it would restructure its power unit and that it faced a deeper accounting probe as new Chief Executive Larry Culp took his first steps to revive the struggling conglomerate.

GE said the U.S. Securities and Exchange Commission and Department of Justice had expanded ongoing investigations to include a $22-billion writedown of goodwill from GE’s power division, which GE reported on Tuesday.

GE latest restructuring of power comes as the 126-year-old company, once the most valuable U.S. corporation, is reeling from missteps that have eroded profits and forced it to announce more than $40 billion in writedowns in less than a year, among the largest such actions in U.S. corporate history.

Culp, who took over on Oct. 1, delivered more bad news on Tuesday: GE will significantly miss its full-year cash flow target of about $6 billion, and cannot estimate profits for the year until Culp gets more detail about its ailing power unit.

-snip-

Read more: https://www.reuters.com/article/us-ge-results/general-electric-reveals-deeper-regulatory-probe-restructuring-idUSKCN1N41BJ

[mahatmakanejeeves]

1. I was going to post about GE's travails. You beat me to it.

Thanks for starting the thread.

Full disclosure: I own some, but not so much that I'm wailing and gnashing my teeth. I keep think about buying more. Maybe at a lower price. Without further ado:

Business

General Electric cuts dividend, splits loss-making power unit

Reuters Reuters•October 30, 2018

By Alwyn Scott and Rachit Vats

(Reuters) - General Electric Co slashed its quarterly dividend to just 1 cent per share and said it would split its power unit into two businesses as new Chief Executive Larry Culp took his first steps to revive the struggling conglomerate.

GE made an expensive bet on fossil fuels with a pricy 2015 acquisition and is still working to cut debt and revive its sagging stock price. Its revenues and profits have declined over the years, in part as GE pulled back from finance and other businesses. The 126-year-old conglomerate was once the most valuable U.S. corporation but has slimmed down to focus on jet engines, power plants and renewable energy.

The industrial conglomerate said Tuesday it will significantly miss its full-year cash flow target of about $6 billion. It also said the U.S. Securities and Exchange Commission had expanded its probe of GE's accounting to include a large writedown of goodwill from GE's power division. The Department of Justice is also investigating GE's accounting.

GE reported a $22.8 billion loss for the third quarter on Tuesday, largely due to the writedown in the value of its GE Power business. The power business also lost $631 million in the quarter, GE said.
....

(Reporting by Alwyn Scott in New York, Rachit Vats in Bengaluru; editing by Patrick Graham and Nick Zieminski)

[Wellstone ruled]

2. So much for Sigma Seven,huh.

Welch sure did a number on this company,did he not. When you keep refocusing every few years,well,you dumped your best customers.

All about dumping their Union obligations.

[nitpicker]

3. GE shares plunge as investigation widens

https://www.bbc.com/news/business-46038495

GE shares plunge as investigation widens

30 October 2018

Shares in General Electric plunged by more than 8% following investor concerns about the turnaround prospects at the once-mighty industrial giant.

GE admitted that US civil and criminal authorities had widened investigations into accounting practices at the firm. It also reported worse than expected third quarter results. It said that it would drastically cut its payment to shareholders to pay down debt and will restructure its struggling power business.

(snip) shareholders dumped stock in the 126-year-old conglomerate to send its share price down to the lowest level since 2009.

GE missed forecasts with a third quarter loss of $22.8bn after it was forced to take a $22bn writedown on its power division. evenues fell down 4% to $29.6bn.

The Securities and Exchange Commission has expanded its investigation into GE's accounting practices to include the $22bn charge.
(snip)

[mahatmakanejeeves]

4. No Rest for GE Shares as Analyst Warns of More Tax Troubles

Full disclosure: I own shares of GE.

No Rest for GE Shares as Analyst Warns of More Tax Troubles

Bloomberg
Esha Dey, Bloomberg • November 2, 2018

(Bloomberg) -- It’s been one thing after another at General Electric Co. and the spiral of gloom is showing no signs of abating.

Shares are down for the eight straight day, the longest losing streak in a year, despite a turnaround plan announced by the much-respected new Chief Executive earlier this week.

A credit rating downgrade by Moody’s and a patent challenge from Toyota have weighed on recent sentiment. And if that weren’t enough, Gordon Haskett analyst John Inch now warns GE’s near-term tax liabilities could rise significantly, possibly amounting to billions of dollars more over the coming months.
....