General Electric has shocked markets after abruptly replacing its chief executive, John Flannery, just 14 months into his tenure, and announcing a multi-billion dollar hit on the value of its struggling power business.
GE also announced its cash-flow and earnings per share would be less than previously indicated, because of problems at its GE Power division. GE Power's current goodwill balance is approximately $23 billion and the goodwill impairment charge is likely to constitute substantially all of this balance. More than 90 percent of the transactions Culp oversaw at Danaher were company takeovers, according to data compiled by Bloomberg.
GE shares are up more than 10% on the news.
H. Lawrence Culp Jr. will take over as chairman and CEO immediately.
Culp is known as a specialist in turning companies around.
While noting that while Culp has work to do, "I wouldn't want to bet against Larry", Davis added.
The company expects to take a non-cash goodwill impairment charge related to the GE Power Business.
General Electric Chief Executive Officer John Flannery presents the company's new strategy and financial targets to investors at a meeting in NY, U.S., November 13, 2017.
Flannery replaced Welch successor Immelt, himself pushed out earlier than expected last summer after nearly 16 years at the top. GE had fallen 35 percent this year through September 28, following a 45 per cent decline in 2017.
GE, however, has not seen such gains, particularly when it comes to its power business which was hit by problems with its latest generation of gas turbines and posted a $10 billion loss previous year. Thomas Horton, the former CEO of American Airlines who also joined GE's board this year, was named lead director.
GE cited "weaker performance in the GE Power business" as one reason for the change at the top.
Last week the company's market value fell below $100 billion for the first time since March 2009.
"We will be working very hard in the coming weeks to drive superior execution, and we will move with urgency, " Culp said in the statement.
'We remain committed to strengthening the balance sheet including de-leveraging'.