General Electric Co (GE) on Friday offered a downcast earnings outlook based on weakness in its oil and gas and power divisions, as the company’s leadership transitions to incoming chief executive officer John Flannery.
GE, which last month tapped Flannery to replace longtime CEO Jeff Immelt, said it expects full-year earnings to be on the low end of its range.
GE shares tumbled 2.9 percent to close at US$25.91, making it the biggest loser in the Dow Jones index.
In addition to the disappointing outlook, analysts also cited suspicions the company is in “somewhat of a state of limbo” amid the leadership change, as one put it.
Some of GE’s performance metrics improved from the first quarter, but “not enough to change the narrative,” JPMorgan Chase & Co said in a note, warning that the company could trim back share repurchases.
GE executives expressed strong support for keeping the dividend, but appeared to hint at a slower pace of share repurchases, which analysts view as diluting the stock.
“The mosaic of results here looks worse than peer reports so far this season,” JPMorgan said.
Net income was US$1.2 billion, down 57 percent from the same period a year ago.
Revenue fell 11.8 percent to US$29.6 billion, but that is in comparison to the same period last year, which was boosted by inclusion of appliances assets that have since been sold.
GE has struggled to ignite strong growth in its industrial divisions after Immelt over the past two years moved to sell massive finance assets.
In the second quarter, oil and gas once again proved a drag, with profits falling more than 50 percent.
Profits also fell in the power and transportation divisions, but rose in renewable energy, aviation and healthcare.
Executives cited “softness” in GE’s business for providing services during power plant turnarounds and warned demand for natural gas turbines could fall again next year.
GE’s oil and gas business also remained weak.
“The oil and gas environment remains challenging,” chief financial officer Jeffrey Bornstein said in a conference call. “Our legacy business sees some improvement in activity, but we have not seen meaningful increases in customer capital. Oil prices remain volatile and as a result our customers remain cautious.”
Flannery said he is conducting “deep dives” into each of GE’s business lines and promised a “hard look” at corporate spending.
He plans a full report to investors in November.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last