7.05 0.00 (0.00%)
After hours: 7:58PM EDT
|Bid||7.03 x 3200|
|Ask||7.04 x 36100|
|Day's range||6.86 - 7.18|
|52-week range||5.48 - 13.26|
|Beta (5Y monthly)||0.96|
|PE ratio (TTM)||N/A|
|Earnings date||29 Jul 2020|
|Forward dividend & yield||0.04 (0.59%)|
|Ex-dividend date||06 Mar 2020|
|1y target est||8.12|
The industrial conglomerate already faced near-term challenges before the COVID-19 pandemic took the wind out of its strongest businesses.
Shares of industrial giant General Electric (NYSE: GE) tumbled 5% in early trading Friday, and remain down 3.6% as of 10:40 a.m. EDT. What precisely is causing GE stock to fall, however, is a matter of opinion. When considering why a stock as gigantic as GE ($57 billion in market capitalization, $93.5 billion in annual sales) is going down, you have to expect that there will be a lot of factors at work.
The UK economy is showing early signs of recovery as the government pushes ahead with easing lockdown restrictions. Job vacancies are starting to reopen, the decline in household spending has eased and more businesses are trading again. The number of UK organisations reporting on their gender pay gap has halved during the past year, adding to concerns that the coronavirus pandemic could set back equality in the workplace.
Shares of General Electric (NYSE: GE) fell 7% on Thursday, weighed down by the company's CEO warning that investors should expect negative free cash flow in 2020. The company was already facing a difficult future as the year began, and the COVID-19 pandemic is only adding to the challenges ahead. General Electric entered 2020 in the early stages of a multiyear turnaround, seeking to reverse years of share-price declines due to market-topping acquisitions and the accumulation of a huge debt burden.
General Electric (NYSE: GE) forecasted negative free cash flow for the full year this week. The new CEO, Larry Culp, took over the company's sprawling asset portfolio 18 months ago, and still has work to do. Proceeds from that sale raised the company's liquidity position by over 20% during Culp's first year on the job, which should help offset this year's negative free cash flow.
(Bloomberg) -- General Electric Co. said its second-quarter cash burn will worsen to as much as $4.5 billion as the troubled manufacturer struggles to keep its turnaround efforts on pace amid disruptions from Covid-19.The company’s jet-engine business faces a “slow grind” as travel demand collapses, Chief Executive Officer Larry Culp said at a Bernstein conference Thursday. The company’s forecast that it will consume $3.5 billion to $4.5 billion of its cash reserves compares with the $2.98 billion average of analyst estimates compiled by Bloomberg.“Losing that much money adds meaningfully to GE’s elevated net leverage burden and comes at a time when other multi-industry companies are generating substantial amounts of free cash flow,” John Inch, an analyst at Gordon Haskett, said in a note to clients.The novel coronavirus pandemic is complicating Culp’s efforts to turn around GE after one of the deepest slumps in the company’s 118-year history. While the company’s medical-scanner business is showing signs of a rebound, the jet-engine division faces weaker demand and the power-equipment unit will take longer than expected to recover, Culp said.GE fell 3% to $7.07 at 12:56 p.m. in New York. Shares had declined 35% this year through Wednesday.Earlier this month, GE said it would cut about 13,000 jobs from the jet-engine operation, saying the “deep contraction of commercial aviation is unprecedented.” On Thursday, the company offered more detail on its plan to save more than $2 billion of cash in its aviation unit through measures including job cuts, furloughs and reductions in capital spending.However, the CEO also struck a resolute note. While Covid-19 has delayed GE’s plan for a return to growth, it hasn’t thrown it off course, Culp said.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- WeWork’s board is scheduled to vote on appointing two new directors on Friday, a critical step in a clash between shareholder SoftBank Group Corp. and a rival faction at the troubled co-working startup.A lawyer for WeWork told Delaware Chancery Court Judge Andre Bouchard in a letter that the company plans a May 29 meeting to fill two empty independent director seats. The nominees are Alex Dimitrief, General Electric Co.’s ex-top lawyer, and Frederick Arnold, the former chief financial officer for Convergex Group.SoftBank and the rival board faction are feuding over the Japanese conglomerate’s decision to scrap a $3 billion deal to buy stock from WeWork’s former Chief Executive Officer Adam Neumann and other shareholders. SoftBank agreed to the purchase last year as it bailed out the struggling startup, but then notified stockholders in March that some of the deal’s conditions hadn’t been met.Two independent WeWork directors then sued SoftBank for not following through on the transaction. One of them, Bruce Dunlevie, is a partner at the venture firm Benchmark Capital, which had planned on selling WeWork shares to SoftBank as part of the agreement.The new directors, who are expected to butt heads with the pair who filed the suit, will be on a special board committee tasked with deciding whether Dunlevie and another board member, Lew Frankfort, can properly represent the company in the SoftBank suit.In a court hearing Wednesday, Bouchard rejected bids by Dunlevie and Frankfort to block WeWork from adding new directors. Dunlevie and Frankfort were the only members of the earlier special committee that made the decision to sue. They had sought a so-called “status quo” order to maintain the company’s operations during the SoftBank litigation.“We believe SoftBank has no basis to question the special committee’s authority to bring this action and we are pleased by the court’s recognition that any effort by SoftBank to challenge that authority must be presented” to Bouchard, a spokesman for Dunlevie and Frankfort said Wednesday.SoftBank-backed WeWork officials said they are acting in the best interest of the company.“WeWork is pursuing best practices of corporate governance to determine what role if any WeWork should have in this contractual dispute among its shareholders,” Sarah Lubman, a SoftBank spokeswoman, said in an emailed statement. “The court’s decision today allows that process to go forward.”In their suit, Dunlevie and Frankfort contend SoftBank had “buyer’s remorse” and reneged on promises to “use its reasonable best efforts to consummate” the stock-purchase agreement.They also noted the agreement doesn’t contain a so-called “material adverse effect” provision or similar termination right that is common in such deals. Two years ago, a Delaware judge found such a provision permitted Germany’s Fresenius SE to walk away from its takeover of U.S. rival generic drugmaker Akorn Inc.In a message to shareholders in March, Softbank cited nearly a half-dozen conditions for the deal that WeWork officials hadn’t met, including a failure to renegotiate some leases in the wake of the economic havoc caused by the Covid-19 pandemic.Neumann -- who would have reaped the biggest windfall from the deal -- filed his own suit earlier this month claiming SoftBank is relying on legally faulty pretexts to scuttle the deal.The dispute is among several busted-deal cases tied to Covid-19 that landed in Delaware’s business court. The state is the corporate home to more than half of U.S. public companies and more than 60% of Fortune 500 firms. Chancery judges hear cases without juries and can’t award punitive damages.Dunlevie’s and Frankfort’s suit is The We Company v. SoftBank Group Corp, No. 2020-0258, Delaware Chancery Court (Wilmington). Neumann’s case is Neumann v. SoftBank Group Corp, Delaware Chancery Court.(Updates with judge’s denial of status-quo order in sixth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The UK tax authority has accused General Electric of fraud in a $1bn dispute over tax deductions claimed by the industrial conglomerate going back 16 years. HM Revenue & Customs launched a claim against GE in 2018 arguing interest deductions claimed between 2004 and 2015 by six of its group companies, including financial services unit GE Capital were not correct. This week it emerged in a court hearing that HMRC has applied to change its case to allege that GE made fraudulent misrepresentations to the tax authority.
GE Healthcare today announced U.S. FDA 510(k) clearance of AIR Recon DL. This pioneering technology, using a deep learning-based neural network, improves the patient experience through shorter scan times while also increasing diagnostic confidence with better image quality across all anatomies. AIR Recon DL, developed on GE Healthcare’s Edison intelligence platform, seamlessly integrates into the clinical workflow to generate AIR Recon DL images in real-time at the operator’s console.
(Bloomberg Opinion) -- It’s the end of an era at General Electric Co.The industrial giant that evolved out of the invention of the modern lightbulb agreed on Wednesday to finally sell the remaining vestiges of its lighting business to smart-home company Savant Systems Inc. Terms weren’t disclosed, but the Wall Street Journal reported a price tag of $250 million, which seems like a decent valuation for a business that had become such a small part of GE’s overall enterprise.The symbolism is rich. After all, GE traces its roots back to Thomas Edison, the inventor of the modern lightbulb, and just celebrated the 128th anniversary of the founding merger of Edison General Electric Co. with Thomson-Houston Electric Co. The fingerprints of Edison’s legacy will linger: The lightbulb gave way to the X-ray machine, which GE still sells through its health-care unit, and early versions of the light bulb used carbon filaments, a permutation of which are now used in jet-engine parts made by the company’s aviation unit. And yet, selling the light-bulb business marks another historic break with GE’s past, much like the divestiture of its appliances division to China’s Haier Group in 2016 and its hard crash out of the Dow Jones Industrial Average in 2018. Like Haier, Savant has struck a long-term licensing agreement to continue branding the bulbs with the GE name. GE will live on as a household name, but as a shell of its former self. The lighting sale has been a long time coming. And while the nostalgic side of me may feel a little sad to see GE officially drop out of the consumer landscape, it’s a step forward for CEO Larry Culp’s turnaround efforts. GE considered divesting the division that housed the lighting operations amid the financial crisis of 2008; this more recent sales effort goes back to at least 2016. Jeff Immelt was still CEO back then. His successor, John Flannery, also included lighting in the list of assets he would try to sell as he dug GE out of a cash-flow hole caused by challenges in its gas turbine business. But it was Culp who officially inked a deal to sell the commercial part of the lighting operations to private equity firm American Industrial Partners in late 2018, and he’s the one who’s finally found a buyer for the residential lightbulb business. This asset sale isn’t going make or break the company, but every bit helps as the coronavirus pandemic hobbles GE’s crown jewel aviation unit and deepens its cash crunch. It’s downright impressive that Culp was able to get a deal done at all in the middle of a pandemic. That may be a big reason why GE shares were up more than 9% at one point Wednesday morning after the news. There’s no way to sugarcoat the challenges facing the aviation unit right now. While GE’s fleet of engines is younger than many peers and focuses mostly on the narrow-body jets that are likely to come back into service first as air travel starts to slowly pick up again, a wave of retirements for more maintenance-heavy, older models will still hurt and risks creating a glut of spare parts. It remains unclear why GE’s aviation unit fared so much worse in the first quarter than rival engine maker Pratt & Whitney and other aerospace suppliers. But the lighting sale is a sign that Culp isn’t giving up on turning GE around and adapting the company to its current reality. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brooke Sutherland is a Bloomberg Opinion columnist covering deals and industrial companies. She previously wrote an M&A column for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The conglomerate's turnaround effort took another (small) step forward with the sale of an iconic division.
Massachusetts-based smart home company Savant Systems this morning announced a deal to acquire GE Lighting. The division has existed as part of General Electric since 1911, with its origins reaching back even further to Thomas Edison’s work in the space. Today’s GE Lighting portfolio still largely revolves around bulbs, with some push into more modern corners of the category, including LEDs.
(Bloomberg) -- General Electric Co. cut one of the last remaining links to founder Thomas Edison, as the beleaguered manufacturer wrapped up a three-year process to sell its iconic lightbulb business.Automation-products company Savant Systems Inc. will acquire GE’s consumer operations, including lighting and smart-home goods, and bring on the business’s more than 700 employees, the companies said Wednesday in a statement. They didn’t disclose terms of the deal, which is expected to close later this year.While lighting has become a minor part of GE’s operations, the sale is symbolic for a company that has shed elements of its past as it grappled with dwindling cash and slowing demand. GE in recent years sold its century-old locomotive unit and backed away from some health-care and oil businesses.The lighting unit’s sale is an “important step in the transformation of GE into a more focused industrial company,“ Chief Executive Officer Larry Culp said in the statement.GE will now effectively cease to be a consumer-facing company, focusing primarily on making jet engines and power-generation equipment. The Boston-based manufacturer sold its home-appliances operations in 2016, though the “GE Appliances“ brand name remains in use. Savant also will gain a “long-term licensing agreement“ to use the GE brand.The shares climbed 6.7% to $7.24 at 9:49 a.m. in New York. GE had dropped 39% this year through Tuesday, while the S&P 500 slid 7.4%Lighting IdentityLightbulbs have been central to GE’s identity since its founding. The business traces its roots to 1879, when Edison created the first practical commercial incandescent lamp. His interests around lights and related technologies served as precursors to GE, which was formed in 1892.The company struggled in recent years to adapt to a market upended by government efforts to phase out traditional bulbs in favor of energy-efficient options such as light-emitting diode technology. GE pointed to regulations when it decided in 2010 to close a Winchester, Virginia, factory that was its last U.S. plant making tungsten-filament incandescent bulbs.Read more: GE’s Viral Gaffe: To Reset Smart Bulb, Turn Off, On, Off, On...Then-CEO Jeffrey Immelt had considered selling GE’s appliances and lighting units more than a decade ago but halted the plans because of the financial crisis. In 2015, he separated certain energy-related operations, including commercial LEDs, into a new division called Current, while leaving GE Lighting focused on consumer bulbs and connected-home products.GE officially put the lighting business on the market in mid-2017, and dismantled the operations piecemeal over the following years. It sold some overseas and automotive lighting operations in early 2018 and reached a deal later that year to unload Current.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Thomas Edison's company is selling off the product the inventor is best known for. General Electric (NYSE: GE) said Wednesday it has a deal in place to sell its consumer lighting business to Savant Systems, part of a broader restructuring of the industrial conglomerate. Shares of GE have lost 70% of their value compared to its 1990s heydays, but the conglomerate is attempting to raise cash to pay down the debt by shedding units including its locomotive business, part of its healthcare unit, and lighting.
(Bloomberg) -- Beijing is accelerating its bid for global leadership in key technologies, planning to pump more than a trillion dollars into the economy through the rollout of everything from wireless networks to artificial intelligence.In the masterplan backed by President Xi Jinping himself, China will invest an estimated $1.4 trillion over six years to 2025, calling on urban governments and private tech giants like Huawei Technologies Co. to lay fifth generation wireless networks, install cameras and sensors, and develop AI software that will underpin autonomous driving to automated factories and mass surveillance.The new infrastructure initiative is expected to drive mainly local giants from Alibaba and Huawei to SenseTime Group Ltd. at the expense of U.S. companies. As tech nationalism mounts, the investment drive will reduce China’s dependence on foreign technology, echoing objectives set forth previously in the Made in China 2025 program. Such initiatives have already drawn fierce criticism from the Trump administration, resulting in moves to block the rise of Chinese tech companies such as Huawei.“Nothing like this has happened before, this is China’s gambit to win the global tech race,” said Digital China Holdings Chief Operating Officer Maria Kwok, as she sat in a Hong Kong office surrounded by facial recognition cameras and sensors. “Starting this year, we are really beginning to see the money flow through.”The tech investment push is part of a fiscal package waiting to be signed off by China’s legislature, which convenes this week. The government is expected to announce infrastructure funding of as much as $563 billion this year, against the backdrop of the country’s worst economic performance since the Mao era.The nation’s biggest purveyors of cloud computing and data analysis Alibaba Group Holding Ltd. and Tencent Holdings Ltd. will be linchpins of the upcoming endeavor. China has already entrusted Huawei to galvanize 5G. Tech leaders including Pony Ma and Jack Ma are espousing the program.Maria Kwok’s company is a government-backed systems integration provider, among many that are jumping at the chance. In the southern city of Guangzhou, Digital China is bringing half a million units of project housing online, including a complex three quarters the size of Central Park. To find a home, a user just has to log on to an app, scan their face and verify their identity. Leases can be signed digitally via smartphone and the renting authority is automatically flagged if a tenant’s payment is late.China is no stranger to far-reaching plans with massive price tags that appear to achieve little. There’s no guarantee this program will deliver the economic rejuvenation its proponents promise. Unlike previous efforts to resuscitate the economy with “dumb” bridges and highways, this newly laid digital infrastructure will help national champions develop cutting-edge technologies.What BloombergNEF SaysChina’s new stimulus plan will likely lead to a consolidation of industrial internet providers, and could lead to the emergence of some larger companies able to compete with global leaders such as GE and Siemens. One bet is on industrial internet-of-things platforms as China aims to cultivate three world leading companies in this area by 2025.Nannan Kou, head of researchClick here for researchChina isn’t alone in pumping money into the tech sector as a way to get out of the post-virus economic slump. Earlier this month, South Korea said AI and wireless communications would be at the core of it its “New Deal” to create jobs and boost growth.According to the government-backed China Center for Information Industry Development, the 10 trillion yuan ($1.4 trillion) that China is estimated to spend from now until 2025 encompasses areas typically considered leading edge such as AI and IoT as well as items such as ultra-high voltage lines and high-speed rail. More than 20 of mainland China’s 31 provinces and regions have announced projects totaling over 1 trillion yuan with active participation from private capital, a state-backed newspaper reported Wednesday.Separate estimates by Morgan Stanley put new infrastructure at around $180 billion each year for the next 11 years -- or $1.98 trillion in total. Those calculations also include power and rail lines. That annual figure would be almost double the past three-year average, the investment bank said in a March report that listed key stock beneficiaries including companies such as China Tower Corp., Alibaba, GDS Holdings, Quanta Computer Inc. and Advantech Co.Beijing’s half-formed vision is already stirring a plethora of stocks, a big reason why five of China’s 10 best-performing stocks this year are tech plays like networking gear maker Dawning Information Industry Co. and Apple supplier GoerTek Inc. The bare outlines of the masterplan were enough to drive pundits toward everything from satellite operators to broadband providers.It’s unlikely that U.S companies will benefit much from the tech-led stimulus and in some cases they stand to lose existing business. Earlier this year when the country’s largest telecom carrier China Mobile awarded contracts for 37 billion yuan in 5G base stations, the lion’s share went to Huawei and other Chinese companies. Sweden’s Ericsson got only a little over 10% of the business in the first four months. In one of its projects, Digital China will help the northeastern city of Changchun swap out American cloud computing staples IBM, Oracle and EMC with home-grown technology.It’s in data centers that a considerable chunk of the new infrastructure development will take place. Over 20 provinces have launched policies to support enterprises utilizing cloud computing services, according to a March note from UBS Group AG. Tony Yu, chief executive officer of Chinese server maker H3C, that his company was seeing a significant increase in demand for data center services from some of the country’s top internet companies. “Rapid growth in up-and-coming sectors will bring a new force to China’s economy after the pandemic passes,” he told Bloomberg News.From there, more investment should flow. Bain Capital-backed data center operator Chindata Group estimated that for every one dollar spent on data centers another $5 to $10 in investment in related sectors would take place, including in networking, power grid and advanced equipment manufacturing. “A whole host of supply-chain companies will benefit,” the company said in a statement.There’s concern about whether this long-term strategy provides much in the way of stimulus now, and where the money will come from. “It’s impossible to prop up China’s economy with new infrastructure alone,” said Zhu Tian, professor of economics at China Europe International Business School in Shanghai. “If you are worried about the government’s added debt levels and their debt servicing abilities right now, of course you wouldn’t do it. But it’s a necessary thing to do at a time of crisis.”Digital China is confident that follow-up projects from its housing initiative in Guangzhou could generate 30 million yuan in revenue for the company. It’s also hoping to replicate those efforts with local governments in the northeastern province of Jilin, where it has 3.3 billion yuan worth of projects approved. These include building a so-called city brain that will for the first time connect databases including traffic, schools and civil matters such as marriage registry. “The concept of smart cities has been touted for years but now we are finally seeing the investment,” said Kwok.(Updates with more details on projects from around China in tenth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
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