Profit fell 88 per cent in its troubled power business, attributing the drop to unspecified charges and other factors
Embattled General Electric suffers $10bn loss
General Electric reported a 5 per cent fall in revenue and a $10 billion loss for the fourth quarter on Wednesday, driven by an already announced $11bn charge for insurance losses and taxes.
The US industrial conglomerate said profit fell 88 per cent in its troubled power business, which makes electricity generating equipment, attributing the drop to unspecified charges and other factors, Reuters reported.
However, it stuck by its profit expectations for this year, tamping down fears that problems in its power-equipment and finance operations would force the beleaguered manufacturer to backtrack, according to Bloomberg.
Strength in the jet-engine and healthcare businesses are shoring up confidence in the forecast of $1 to $1.07 a share in adjusted 2018 earnings, GE said on Wednesday.
Revenue and orders also fell sharply at the power business.
GE said cash from industrial operating activities totalled $7.8bn in the quarter, above expectations of about $7bn, Reuters said, and GE said its ability to generate cash is improving.
The results “demonstrate some of the early progress we are seeing from our key initiatives,” the chief executive John Flannery told Bloomberg. “Cash performance was above expectations and our visibility and execution on cash is improving.”
GE’s loss totalled $10.01bn in the quarter, compared with a profit of $3.48bn a year earlier.
On a per-share basis, GE reported a loss from continuing operations of $1.15, compared with a profit of 39 cents per share, according to Reuters.
GE said last week it would book a $11bn charge in the fourth quarter, including $6.2 billion for reevaluation of insurance assets. The insurance charge was double what GE warned last year.
Total revenue fell to $31.4bn from $33.09bn.
General Electric's chief financial officer said on Wednesday the US Securities and Exchange Commission is investigating a recent insurance charge made by the company.
The insurance charge was double what GE had warned last year.
"We’ve been notified by the SEC that they are investigating the process leading to the insurance reserve increase and fourth quarter charge, as well as GE’s revenue recognition and controls for long-term service agreements," CFO Jamie Miller told analysts. "We are cooperating fully with the investigation, which is in very early stages."