*By Carlo Versano*
General Electric, the once mighty conglomerate that traces its roots back to the invention of the light bulb, delivered a hugely disappointing earnings report Tuesday morning, in which the company that was once known for its steady and generous payouts to investors slashed its quarterly dividend to just a penny.
Jim Corridore, senior equity strategist at CFRA Research, called the dividend cut a "bold" and "necessary" measure that will free up cash flow and give the company some breathing room as it embarks on a root-and-branch restructuring. "It had to happen," he said.
Earnings per share were an adjusted 14 cents, compared to estimates of 20 cents. That miss sent shares to the their lowest level since the depths of the recession in 2009.
The earnings report was the first under new CEO Larry Culp, who was brought in a month ago to help turn around the industrial giant. On a call with investors Friday, he said: "Our results are far from our full potential."
He added: "We will heighten our sense of urgency and increase accountability across the organization to deliver better results."
Corridore is a believer in Culp's long-term ability to reinvigorate the stock. "He knows how to run an industrial company," the analyst said. And GE ($GE) has "a lot of good things to work with."
GE made some indications of how it would restructure under Culp, announcing it would split its struggling power business into two separate units. Fixing the problems at that business is the "number one thing that GE needs to do," according to Corridore.
It follows plans to spin off GE Healthcare into a separate company and the unwinding of its beleaguered financial-services arm in order to focus on jet turbines and renewable energy. Aviation has been a particularly strong unit of GE's business, with orders up 35 percent year-over-year, according to the earnings announcement.
Adding to the third quarter woes was a $23 billion loss on an accounting charge stemming from previous power-related acquisitions. GE CFO Jamie Miller said the SEC was investigating that charge as part of its probe into the company's accounting practices.
Corridore predicted the efforts of the turnaround could begin to show themselves in six months to a year.
Earlier this year, GE was booted off the Dow Industrial average, which it had been a part of since 1907. At its peak, the company had a market cap of more than $600 billion.
Today, it's about $97 billion
Joe Cecela, Dream Exchange CEO, explains how they are aiming to form the first minority-controlled company to operate an exchange in U.S. history. Watch!
A Michigan judge is putting sponges in the hands of shoplifters and ordering them to wash cars in a Walmart parking lot when spring weather arrives. Genesee County Judge Jeffrey Clothier hopes the unusual form of community service discourages people from stealing from Walmart. The judge also wants to reward shoppers with free car washes. Clothier says he began ordering “Walmart wash” sentences this week for shoplifting at the store in Grand Blanc Township. He believes 75 to 100 people eventually will be ordered to wash cars this spring. Clothier says he will be washing cars alongside them when the time comes.
The State Department had been in talks with Elon Musk’s Tesla company to buy armored electric vehicles, but the plans have been put on hold by the Trump administration after reports emerged about a potential $400 million purchase. A State Department spokesperson said the electric car company owned by Musk was the only one that expressed interest back in May 2024. The deal with Tesla was only in its planning phases but it was forecast to be the largest contract of the year. It shows how some of his wealth has come and was still expected to come from taxpayers.
At 100 years old, the Goodyear Blimp is an ageless star in the sky. The 246-foot-long airship will be in the background of the Daytona 500 — flying roughly 1,500 feet above Daytona International Speedway, actually — to celebrate its greatest anniversary tour. Even though remote camera technologies are improving regularly and changing the landscape of aerial footage, the blimp continues to carve out a niche. At Daytona, with the usual 40-car field racing around a 2½-mile superspeedway, views from the blimp aptly provide the scope of the event.
You'll just have to wait for interest rates (and prices) to go down. Plus, this deal's a steel, the big carmaker wedding is off, and bribery is back, baby!
It’s a chicken-and-egg problem: Restaurants are struggling with record-high U.S. egg prices, but their omelets, scrambles and huevos rancheros may be part of the problem. Breakfast is booming at U.S. eateries. First Watch, a restaurant chain that serves breakfast, brunch and lunch, nearly quadrupled its locations over the past decade to 570. Fast-food chains like Starbucks and Wendy's added more egg-filled breakfast items. In normal times, egg producers could meet the demand. But a bird flu outbreak that has forced them to slaughter their flocks is making supplies scarcer and pushing up prices. Some restaurants like Waffle House have added a surcharge to offset their costs.
