Profits for the healthcare business at GE rose despite flat sales growth for the third quarter, as the parent company posted a swing to red ink on a -$22 billion charge.
The Boston-based industrial conglomerate reported healthcare profits of $861 million on sales of $4.71 billion for the three months ended Sept. 30, for bottom-line growth of 1.7% on a -0.1% sales decline compared with Q3 2017. The red ink was due to a -$21.97 billion goodwill impairment charge.
GE reported losses of -$22.81 billion, or -$2.62 per share, on sales of $29.57 billion for the quarter, for a top-line slide of -3.6%.
Adjusted to exclude one-time items, earnings per share were 14¢, 6¢ under the consensus forecast on Wall Street, where analysts were looking for sales of $29.90 billion.
GE also said it plans to slash its quarterly dividend from 12¢ to 1¢ andplans to split its power division in two, creating a natural gas unit and a steam, grid solutions, nuclear & power conversion segment.
“After my first few weeks on the job, it’s clear to me that GE is a fundamentally strong company with a talented team and great technology. However, our results are far from our full potential. We will heighten our sense of urgency and increase accountability across the organization to deliver better results,” chairman & CEO Lawrence Culp Jr. said in prepared remarks. “We are on the right path to create a more focused portfolio and strengthen our balance sheet. My priorities in my first 100 days are positioning our businesses to win, starting with power, and accelerating deleveraging. We are moving with speed to improve our financial position, starting with the actions announced today. I look forward to updating you further on our progress in early 2019.”
GE shares, which closed down -1.9% at $11.09 apiece yesterday, were down -1.9% to $11.34 today in pre-market trading.
In June, the company said it plans to spin out GE Healthcare as a stand-alone, publicly traded entity to focus on its aviation, power and renewable energy businesses.