GE Bulb Dims Friday on Revenue, Profit Declines

GE Bulb Dims Friday on Revenue, Profit Declines

Winners and Losers: Shares of General Electric sunk almost 3 percent after posting a decline in second-quarter profit.

GE is the manufacturer of the medical scanners, power plants, jet engines, and other industrial equipment and it said that the profit and sales declines majorly reflected sale of its appliances business.

GE also noted that its backlog during the quarter rose 2% year over year to $326.8 billion.

GE's results translated into 28c per share, 3c above analyst expectations.

The length and scope of the review raised concern, since GE has just come through major shifts in its portfolio.

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In a statement on Friday, Immelt said: "We're looking forward to a smooth transition of the CEO position on August 1, when John Flannery becomes CEO". "People's openness to rethinking things or thinking about things differently or challenging many things we've taken for granted is encouraged, and people get excited about that".

Shares of GE were up more than 1 percent in premarket immediately after the announcement, then fell slightly to trade little changed.

In Chief Executive Jeff Immelt's last report at the helm of General Electric Co., the company showed progress on reaching its cash-flow and cost-cutting goals. He also is "taking a hard look at our corporate spending" to ensure it contributes to earnings, and on a listening tour of investors. We've reduced our Industrial structural costs year to date by $670 million and we are on track to meet or exceed our $1 billion cost reduction target for the year.

Flannery, who´s career with GE spans three decades has latterly been charged with running the company´s healthcare arm. GE set off alarm bells after reporting negative $1.6 billion in industrial operating cash flows in the first quarter, as working capital increased. Despite the beats, EPS declined from 51 cents in the prior-year quarter while revenue declined 12% from $33.49 billion for the same period. Revenue fell 12 percent to $29.56 billion. The company reported a profit of $1.19 billion, or 15 cents a share, down from $2.76 billion, or 36 cents a share, a year earlier.

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