GE Posts $9.64 Billion Loss, With Long Road Ahead in Restructuring Push -- Update

By Allison Prang 

General Electric Co. reported a loss in its latest quarter as the struggling industrial giant zeroes in on restructuring plans under its new chief executive.

Chief Executive John Flannery took over GE in August of last year and is working on restructuring the company, which could involve dividing the company up. Mr. Flannery wants to focus on power, aviation and health care.

On Wednesday GE reported more weakness in its power and transportation divisions, with revenue and operating profit plunging from a year ago.

In prepared remarks Wednesday, Mr. Flannery said "we expect market challenges to continue" for the power division.

The company reported a loss of $9.64 billion, or $1.13 a share, down from a profit of $3.67 billion, or 39 cents a share, in the same period the year before. On an adjusted basis, GE reported a loss of 27 cents a share, down from 46 cents a share. Analysts polled by Thomson Reuters were expecting adjusted earnings of 29 cents a share.

Changes from the new U.S. tax law hurt the company's earnings by 40 cents a share. Earnings were also hurt by a $6.2 billion charge related to its insurance operations. GE, which said it would record the charge last week, also said it needed to set aside $15 billion over seven years to bolster insurance reserves at its GE Capital unit.

In premarket trading Wednesday, shares rose 2.1%. In the last 12 months, they have fallen 44%.

Mr. Flannery has already started some of the turnaround work. Last year, GE cut its annual earnings guidance along with its dividend.

Revenue at GE fell 5.1% to $31.4 billion.

Revenue from oil and gas rose 69%, as the sector's adjusted profit fell 25%. GE finished merging Baker Hughes and its own oil and gas division last summer.

Revenue for the company's power sector fell 15% and operating profit fell 88% from a year ago.

Meanwhile, GE saw higher operating profit and revenue from its aviation and health-care divisions.

Write to Allison Prang at [e-mail]

(END) Dow Jones Newswires

January 24, 2018 08:32 ET (13:32 GMT)

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