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GE profits fall, sending shares sharply lower

Published: Updated:

General Electric reported a decline in third-quarter profits on Friday, sending shares sharply lower, as weakness in the oil and gas and power businesses once again weighed on results.

The US industrial conglomerate, newly led by chief executive John Flannery, reported net profit of $1.8 billion, down 9.7 percent from the year-ago period.

Revenues were $33.5 billion, up 14.4 percent, reflecting the effects of the Baker Hughes oil services acquisition.

The results are the last before a November 13 investor day at which Flannery is scheduled to unveil his strategy for turning around the conglomerate.

Cost-cutting is expected to figure heavily in the plan, but analysts are also expected to press Flannery on divesting assets, a move taken by other conglomerates.

Power division

Revenues and profits tumbled in the power division, where market conditions were “difficult” and volumes were down, Flannery said.

“We believe that the new leadership team at Power and the cost actions that we are taking will better position the company in 2018 and beyond,” Flannery said.

Oil and gas was another burden, as GE booked $267 million in one-time restructuring expenses amid sluggish investment from exploration and production companies.

Better-performing divisions included aviation, healthcare and renewable energy.

Shares tumbled 4.9 percent in pre-market trading to $22.42.