General Electric Makes Progress on Cost-Cutting

Closing Indexes Summary July 21

CFRA analyst Jim Corridore throws in the towel, downgrading shares to Hold from Buy, cutting his price target to $27 from $36 as well as his 2018 EPS estimate to $1.80 from a previous forecast of $1.85.

GE is under increasing pressure to show that its pivot away from financial services and renewed focus on making jet engines, power turbines and other industrial businesses will be good for investors.

John Flannery, who takes over from CEO Jeff Immelt on August 1, will update targets that now include earning $2 a share in 2018. CFO Jeffrey Bornstein sees FY 2017 EPS trending toward the lower-end of its previously stated $1.60-$1.70 range.

GE's shares suffered when Wall Street opened and its latest earnings report sunk in, falling 3.44% to lead the fallers on the Dow Jones as of 16:01 BST. "Despite what we view as generally solid results in the quarter".

It hasn't assisted, because although GE hasn't missed profit expectations for two years, the stock has declined on the day results were revealed in the past six quarters.

The company said Flannery will provide an update on GE's 2018 possible predictions later in the year.

Operating earnings in 2017 will be $1.60 to $1.70, GE said, reaffirming an earlier forecast.

Corporate Earnings Report July 21
Data courtesy of Trade-Alert

Mr. Flannery is meeting with investors and visiting the business units of the complex company.

"I'm not anxious about internal paralysis", Flannery told analysts and investors during the Boston-based company's quarterly earnings call on Friday, June 21. The company backed its full-year target of $12 billion to $14 billion, and Mr. Immelt said the company expects cash flow to continue to improve throughout the year. It has cut $670 million so far this year. Of that total $242.6 billion is services backlog and $84.2 billion is equipment.

Aviation and slid 3 percent in the oil and gas unit, which has struggled amid the plunge and sluggish recovery of crude prices.

The General Electric Q2 2017 earnings and Moody's Q2 2017 earnings reports were released before opening bell this morning. Much of the drop came from a year-ago boost from the sale of its home appliances business. Earnings, adjusted for non-recurring costs and to account for discontinued operations, were 28 cents per share.

General Electric said Friday it recorded a 12 percent decline in overall revenues, with its oil and gas division taking a toll on the company's financials. The company reported 30 cents per share in earnings on $33.49 billion in revenue.

Imani Moise contributed to this article.

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