GE Will Need More Cost Cuts to Hit 2018 EPS Goal, CEO Says

By Thomas Gryta 

Jeff Immelt, General Electric Co.'s chief executive, is standing by a closely watched goal of generating $2 a share in earnings in 2018, but he signaled Wednesday that struggling resources markets pose a risk to reaching the target.

Wall Street has speculated on whether the industrial bellwether would walk back from the 2018 earnings target it set in 2015, and many are doubtful the company will make it. Analysts currently expect $1.89 a share, according to Thomson Reuters.

In a presentation at an investor conference, Mr. Immelt reassured investors that the company's cash position remains strong, its dividend is a priority and it remains committed to 2018 goals.

He shared a PowerPoint slide that showed the $2 EPS target but noted it would be at the high end of expectations, given current market conditions. He said reaching the goal would likely require additional cost savings.

"If we wanted to take it off the page, we would have taken it off the page," Mr. Immelt told the audience. "And we didn't want to."

Investors are reading the presentation as negative, shares dropped nearly 2% to $27.73 in midday trading. The shares, which have attracted activist investor Trian Fund Management, have fallen 12% so far this year.

Write to Thomas Gryta at [e-mail]

(END) Dow Jones Newswires

May 24, 2017 13:27 ET (17:27 GMT)

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