General Electric (NYSE: GE) shares have fallen by more than 50% this year. On Monday, the stock had hit a nine year low as it tumbled below USD 8 per share at USD 7.72 per share. The Company’s recent earnings report were described as “worst than expected at almost all fronts” by the Stephen Tusa, who is the firm’s analyst. GE’s reported third-quarter profits fell drastically below Wall Street expectations.
Following this report, General Electric’s Chairman and CEO Larry Culp proclaimed to the public that he intends to take action by selling assets in return for cash. As a result, this would reduce the Company’s leverage. Larry Culp has been appointed CEO for shortly over a month. In a move by Culp, General Electric had diminished its quarterly dividend to a penny a share.
“The stock has been under pressure, no doubt about that,” Culp had said.
In an interview with CNBC’s David Faber as part of the segment “Squawk on the Street”, he said, “We need to bring the leverage down… we have no higher priority right now than bringing those leverage levels down.” The CEO had shown he felt urgency to bring upon this action, but emphasized that the deleveraging process will not be rushed and acted upon indecisively. In addition Culp noted General Electric does not intend to raise equity.
With constant rotations of recent negative news on the Company, Culp provides us with Company insight and direction.