GE's Profit Falls as Power Division Remains a Drag

By Thomas Gryta

General Electric Co.'s (GE) second-quarter profit dropped 30% as the company's power division continued to offset growth in other major units.

While the conglomerate backed its 2018 profit goal, it said free cash flow would be at the low end of its previous estimate. The industrial conglomerate's adjusted earnings of 19 cents a share beat Wall Street expectations of 17 cents a share for the period, according to Thomson Reuters. Revenue of $30.1 billion also topped consensus projections of $29.3 billion.

GE recently unveiled its road map for restructuring under new Chief Executive John Flannery, a series of moves to significantly dismantle the conglomerate without a complete breakup of the onetime bellwether. Over several years, GE separated its Healthcare unit into a separate company and exited its majority holding in oil-and-gas firm Baker Hughes. GE said Friday that its plan to sell $20 billion in assets is "substantially complete."

"We saw continued strength across many of our segments, especially in Aviation and Healthcare," Mr. Flannery said in prepared remarks, noting that GE cut costs in its industrial divisions by $1.1 billion in the first half of 2018.

"We expect the power market to remain challenging, and we continue our focus on operational improvement," he said.

By Thomas Gryta at [e-mail]

(END) Dow Jones Newswires

July 20, 2018 06:59 ET (10:59 GMT)

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