GE shares at 9-year low amid latest power woes
New York (AFP) –
Shares of General Electric fell again on Tuesday, adding to losses following the company's latest woes in its slumping power division.
The industrial conglomerate, which was bumped from the prestigious Dow index in June, fell 2.5 percent in late-morning trading to $11.45.
Shares of GE -- which are now at a nine-year low -- have fallen more than 10 percent since last Wednesday, following news of a glitch in new power-plant turbine technology that temporarily shut two electricity plants in Texas.
GE Power President and Chief Executive Russell Stokes described the problem as an "oxidation issue that affects the lifespan of a single blade component," saying on LinkedIn that the development was "frustrating" but that the company had identified "a fix."
But a note last week from JPMorgan Chase analyst Stephen Tusa said the problem was potentially more serious and raised worries that there were "more shoes to drop" at the 126-year-old company. Tusa lowered his share price target on the company to $10 from $11.
Buffeted by weak conditions in its power and oil and gas businesses, GE has cut costs and announced plans to exit the healthcare and oil services business. The changes have been overseen by Chief Executive John Flannery, who took over in June 2017.
Morningstar analyst Joshua Aguilar said the company's travails in its power business would take time to turn around due to overcapacity, in part because of increased use of renewable energy.
"This is not a quick fix," he said.
© 2018 AFP