 have seen their share price slump in early trading as they announced on Friday that earnings were short of forecasts.){kind=link}
General Electric (NYSE:GE) have seen their share price slump in early trading as they announced on Friday that they were well short of forecasted earnings per share (EPS).
The share price has dropped over 6% in early trading, as GE revealed their EPS were 29c for Q3, well below expectations of analysts polled by Thomson Reuters, which were 49c, as well as being 9% less than their EPS last year.
GE’s revenue for the quarter was $33.5 billion, which is a 14% increase on last year and above analyst expectations of $32.6 billion, however their net earnings fell to $1.8 billion, a 5% decrease compared to last year.
Cash flow for GE was also an area of poor performance as their cash from operating activities has dramatically fallen to $4.1 billion which, compared to last year, is a decrease of 78%. This decline in cash flow may see GE cut dividends.
In his first earnings statement CEO John Flannery said that “this was a very challenging quarter,” and that “while a majority of our businesses had solid earnings performance, this was offset by a decline in Power performance in a difficult market”.
Flannery also commented on the drop in cash flow blaming “lower Power volume, resulting in lower earnings and higher inventory”. He also attempting to take a more positive stance looking into the future of their Power division, saying “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”.
The company has also lowered its expectations for its 2017 EPS from the range of $1.60-$1.70 to $1.05-$1.10.
GE’s share price in early trading fell 6.32% to $22.09 at the time of writing.