GE Says 2019 Will Be A 'Reset' Year
There's another tough year ahead for General Electric.
The Boston-based conglomerate on Thursday issued a bleak forecast for 2019 that warned of lower profit targets and weak cash flow.
GE said its industrial operations could lose $2 billion more cash than they generate this year. GE also said it has cut its corporate staff down to 18,000 workers -- from 28,000 at the end of 2017 — and there are "more actions underway."
“GE’s challenges in 2019 are complex but clear," CEO H. Lawrence Culp Jr. said in a statement. "We are facing them head on as we execute on our strategic priorities to improve our financial position and strengthen our businesses."
Kevin Hawkinson, an executive director at the Boston branch of investment bank Oppenheimer, said Thursday’s forecast offered the first clue that GE has a clear picture of its challenges and has a plan to turn things around.
“They are continuing to pare down their business, eliminate unnecessary costs, and put themselves in a more financially stable position in order to deliver value to the shareholders as well as deliver earnings to the corporation,” Hawkinson said in a phone interview.
GE is currently undergoing a costly restructuring. After years of turmoil, the industrial technology giant has been scaling down operations, shedding a health care division, and selling its oil and gas business.
Just last month, GE said it will scale back its Boston headquarters and reimburse the state $87 million it received in incentives to move to the city. The move includes selling property that was slated for a gleaming 12-story office building.
GE said 2019 will be a "reset" year for the company, and it expects to perform better and have a more positive cash flow in 2020 and 2021.