According to multiple reports, GE Chief Executive Officer Larry Culp told attendees at the JP Morgan Industry Conference its industrial operations will lose money this year.
After the statement, GE’s stock dipped a little more than 5%, and as of Wednesday morning, March 6, would open at $9.89 a share. That is down from Tuesday, March 5, when it reached $10.55 a share at one point.
During the event, Culp said the power division lost $2.7 billion last year, and he expects that number to be even higher this year during his restructuring plan. Culp added that he expects the aviation and renewable energy divisions to perform well, which may offset the industrial losses. Last year, GE’s free cash flow, or remaining money after expenses are paid, was $4.5 billion. According to Culp, this year that number will be negative
“If we’re going from $4.5 billion in 2018 to what I’m framing as negative territory in 2019, it’s really a combination of operational pressure, power renewables, and then the non-operational pressures that I’m calling ‘policy,’” Culp said at the conference. “We highlight restructuring in a host of different ways but what I’d like to have it be is more consistent.” Culp added that he expects the power business to struggle for more than one year.
“We know power is in a turnaround mode and that’s not going to be a quick turnaround by any stretch,” Culp said. “It’s going to be a few years before we can call the end of that.”Tagged with Biggest News, GE Energy, GE power