- General Electric abruptly removes John Flannery as chairman and CEO and installs former Danaher CEO Lawrence Culp as his successor.
- The board had grown frustrated with the slow pace of change under Flannery, sources familiar with the issue say.
- GE also will take a $23 billion noncash charge for its struggling power business.
- The company says it expects to “fall short of previously indicated guidance for free cash flow and EPS for 2018.”
Struggling industrial conglomerate General Electric abruptly removed John Flannery as chairman and CEO on Monday after only a year on the job, and installed former Danaher CEO Lawrence Culp as his successor.
GE shares, which had fallen to a nine-year low last week, surged in reaction.
GE also announced a $23 billion noncash charge for its ailing power business and said it will “fall short of previously indicated guidance for free cash flow and EPS for 2018,” as many on Wall Street had warned.
(Bloomberg) — On August 28, 2000, Apple’s hottest product was a candy-colored computer, Donald Trump was a New York real estate mogul and General Electric Co. was worth some $600 billion.
Apple and Trump have gone on to greater things. GE? It’s on the verge of a staggering milestone: a half-trillion dollars in market value wiped out since that all-time high 18 years ago. On Monday the company made the surprise announcement that it was replacing Chief Executive Officer John Flannery, who has been unable to stem the slide in the company’s shares after just more than a year in the job.
The iconic American corporation is now worth just under $100 billion, its stock at around $11 at Friday’s close, and investors are signaling they don’t expect things to get better. While the stock surged Monday after the announcement of the change at the top, the shares — and the company — have a massive hole to dig out from.
The collapse — an 81 percent drop from the peak — is all the more startling as it comes amid record-setting market gains. Apple Inc. recently became the first U.S.-based company to top $1 trillion in market value, followed shortly thereafter by Amazon.com Inc.
Even longtime GE observers, bears among them, are stunned. “Wow,” said Steve Tusa, a JPMorgan Chase & Co. analyst who has followed GE since 2001, when asked about the half-trillion figure.