GE tumbles to 3-month low as power-unit woes sap 2019 cash

Bloomberg

General Electric Co.’s new boss warned of additional cash problems at the ailing company, eroding confidence in a nascent turnaround and sending the shares tumbling.
Cash flow from GE’s industrial operations will be negative this year as GE grapples with further challenges in its power business and other operational pressures, Chief Executive Officer Larry Culp said at an industry conference. That’s a sharp drop from 2018, when the maker of gas turbines and jet engines brought in $4.5 billion by the closely watched measure.
“We think this is a transformation in the making, but we need to pay the piper,” he said. GE is taking steps now to “manage though a challenging time, with an eye toward ‘20 and ‘21.”
The startling revelation underscored how far Culp has to go to pull GE out of one of the deepest slumps in its 127-year history. Since taking the helm in October following the surprise ouster of John Flannery, Culp has announced a restructuring of the power-equipment unit, cut costs and agreed to the $21.4 billion sale of a bio-pharmaceutical business.
The shares reversed earlier gains and plunged as Culp spoke at the JPMorgan Chase & Co. conference in New York. GE fell 4.7 percent to $9.89 at the close in New York, the biggest decline in three months.
The slide sapped momentum from a rally that started the year. GE had surged 43 percent, buoyed by the CEO’s focus on strengthening the balance sheet and selling assets. Last year’s slump was the worst since at least the early 1970s.