General Electric Co Chief Executive Larry Culp on Thursday set conservative prof...
- General Electric Co Chief Executive Larry Culp on Thursday set conservative profit targets for this year and staked his reputation on hitting them and doing better in 2020 and beyond, igniting a rally in the stock.
The forecast was low largely because GE will be spending $2.5 billion on restructuring this year, Culp said, adding the investment would pay off after a tough 2019.“The market should interpret a high level of conviction simply because this team, in a public forum, is laying this roadmap out, mindful of the realities of 2019 but I think also optimistic ... about the impact of what we’re doing.”
Investors are looking closely at GE’s cash and earnings after the company lost nearly $23 billion last year.The company did not make reference to any potential hit to its jet engine unit from the recent global grounding of Boeing Co’s 737 MAX aircraft. GE and partner Safran SA make the engine that powers all 737 MAX planes.
Culp also left considerable wiggle room in the forecast by including an unspecified amount of “contingency” money to cover hard-to-predict costs, such as when it will conclude big asset sales and how its power unit will perform.
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