Earlier in this week, General Electric dropped a bombshell while announcing its financial results and business outlooks for the next two years. The company cut its dividend in half and planned to strategically downsize its business by narrowing its focus on three key sectors.

(Image: Reuters)

The long-leading lighting conglomerate registered a consolidated revenue of USD 33.5 billion in 3Q17, up 14%. EPS slid by 9% to USD 0.29. The company’s stock is tumbling down, 7.5% after the announcement was made.

John Flannery, new chairman and CEO, said GE is narrowing focus to its most profitable divisions- avaiation, healthcare and energy- and considering to pull down transportation, industrial, and even its historic lighting businesses.

The company slashed its quarterly dividend to 12 cents, which is believed to be able to save it USD 4 billion a year, according to Los Angeles Times.

The divisions GE planned to invest more saw growth in their segment revenue. Revenue of renewable energy unit stood at USD 2.9 billion with an increase of 5%, aviation’s witnessed a 8% rise to USD 6.81 billion, and healthcare’s also a hike of 5% to USD 4.72 billion.

In comparison, revenue of transportation segment slumped by 14% to USD 1.07 billion and that of lighting plummeted by 16% to merely USD 483 million.

Flannery stated the company would undergo a reset in 2018 and projected a profit in a range of USD 1- 1.7 per share. GE also estimated weaker cash flows than the market had expected. The company’s shares are down 38% this year and trading at five-year lows.

The CEO said last month that GE would cut off business units worth more than USD 20 billion possibly in the following two years. It has been doing business downsizing for more than 10 years now. Flannery explained the plans are intended to make the company simpler and stronger.

GE has reportedly cut an industrial cost of over USD 1 billion this year and it plans over USD 2 billion in cuts in 2018, which is two times the original target.

The company’ board will experience some changes as 6 of 19 members will exit. Two of its vice chairs will resign at the end of 2017 following former CEO Jeffrey Immelt’s departure.  However, three new directors with relevant industry experience will join. Changes will take effect by Arpil.

As for whether Current, also branded as Current, power by GE, will still be under GE, the answer is negative, as GE replied EdisonReport at LuxLive in UK. It is confirmed to be for sale.