General Electric cuts profit outlook ahead of turnaround plan

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EPA

General Electric has slashed its profits guidance after posting a quarterly loss due to weak trading in two key divisions.

The industrial group the idea unveiled a 5% fall in third quarter earnings to $1.8bn, sending its shares sharply lower before later recovering.

completely new chief executive John Flannery is actually due to announce a restructuring of the group next month.

GE’s divisions range coming from jet engines, oil, transport, healthcare as well as finance.

A weak performance in its power as well as oil as well as gas businesses, plus higher-than-expected restructuring costs, were the main causes of the profit decline.

Profit within the power business, which makes generators, turbines, as well as related equipment, fell 51% within the quarter.

GE also cut its forecast for full-year operating profits to between $1.05 as well as $1.10 a share, compared with the estimate of $1.60-$1.70 a share the idea made in July.

In early trading on Wall Street, GE shares were down more than 3%, the second biggest faller on the Dow Jones index.

the idea later made back those losses to finish the day 1% higher after investors warmed to a pledge by Mr Flannery to do what the idea takes to turn around the firm.

Mr Flannery, who took over coming from GE veteran Jeff Immelt, said on Friday of which investors could expect “sweeping change” coming from his review of the businesses, as well as of which the company would likely focus on profit, cash generation as well as accountability of employees.

He said he saw room to cut more than $2bn in costs next year, double the current target, as well as of which he had found more than $20bn in assets of which GE could sell over the next two years.

The completely new boss has already commenced shaking up the leadership team, as well as recently gave a board seat to activist investor Trian Fund Management.

The company, one of the biggest within the US, reported a 14% rise in revenue to $33.47bn within the third quarter, boosted by the acquisition of oilfield services provider Baker Hughes.

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