GE tumbles on worries about its outlook
New York: Shares of General Electric tumbled Thursday on worries that weak activity in its key electricity and oil and gas businesses could hit earnings much harder than investors expected.The industrial conglomerate dropped 3.6 percent to $24.02 following a bruising appraisal of the company’s prospects by analysts at JPMorgan Chase.
Analysts on average expect GE to earn about $1.70 per share in 2018, but problems across central business lines are likely to shrink earnings to just $1.15 to $1.20 per share, JPMorgan warned.There are “continued risks” in GE’s power business, a sluggish recovery in oil and gas due to still-tepid oil prices and slower growth in renewable energy, the analysts said in a research note.
While aviation and healthcare remain comparatively strong, that is not enough to offset the other problems areas, the report said, adding, “bottom line: clear downside to current expectations.””There are more negatives than positives.”
Dow member GE has lost more than 23 percent of its stock valuation in 2017, sharply underperforming the blue-chip index in a good year for many equities.In June, GE announced that longtime chief executive Jeff Immelt would retire and be replaced by longtime company executive John Flannery.
Flannery is expected to outline his vision for the company later this fall, but JPMorgan expressed skepticism that he will be able to ignite significantly faster growth anytime soon.
Source: AFP
