Categories Other Industries, U.S. Markets News

GE to get rid of consumer lighting business as cash crunch escalates

Engineering giant General Electric (GE) has been on a divestiture spree, in an effort to revitalize its balance sheet. On the heels of charting out a plan to salvage the ailing power division, the company this week announced its decision to sell the consumer lighting division titled Current, the latest unit to part ways with the group.

If the ongoing negotiations come to fruition, the consumer lighting business of the Boston-based industrial juggernaut will become a part of New York-based private equity firm American Industrial Partners in the coming weeks. While it is speculated that the transaction would complete early next year, the financial terms have not been disclosed.

After taking charge as the new CEO last month, succeeding John Flannery who left more than a year after joining the company, Larry Culp set a new direction for the comprehensive restructuring plan envisaged by his predecessor. It needs to be seen whether Culp would tweak the core agenda of reducing the conglomerate to its aviation, power and healthcare businesses.

While  the transaction is expected to be completed early next year, the financial terms have not been disclosed

Exposing the dismal state of affairs, the management recently reduced the dividend to a meager 1 cent from 12 cents in an effort to rein in the company’s faltering cash flow. Announcing its first quarterly report under Culp, GE recently reported earnings of $0.14 per share on revenues of $29.57 billion for the third quarter, both below the estimates.

GE has raised about $10 billion through asset sales since it launched the turnaround program a year ago, including the century-old rail business and automotive lighting business. Things took a turn for the worse last week when federal prosecutors launched an investigation into a multi-billion dollar write-down of the company’s power division.

General Electric misses on Q3 estimates, cuts dividend again

The ‘Current’ segment provides consulting services to companies and government agencies on optimizing electricity usage by managing their lighting systems digitally. It is widely speculated that the company would get rid of the rest of its consumer-lighting business in the future.

After falling about 54% over the last year, GE shares are currently trading at a near-ten-year low. The stock, which dropped about 50% since January, traded higher throughout Tuesday’s regular session.

 

Listen to publicly listed companies’ earnings conference calls along with the edited closed caption text

Most Popular

FDX Earnings: FedEx Q1 adjusted earnings drop; revenue up 5%

Cargo giant FedEx Corporation (NYSE: FDX) Thursday reported a decline in first-quarter adjusted earnings, despite an increase in revenues. The company also provided guidance for fiscal 2023. Net income, adjusted

Key highlights from Darden Restaurants (DRI) Q1 2023 earnings results

Darden Restaurants, Inc. (NYSE:DRI) reported first quarter 2023 earnings results. Total sales increased 6.1% year-over-year to $2.4 billion, driven by blended same-restaurant sales growth of 4.2%. Net earnings amounted to

ACN Earnings: Key quarterly highlights from Accenture’s Q4 2022 financial results

Accenture (NYSE: ACN) reported fourth quarter 2022 earnings results today. Total revenues were $15.4 billion, up 15% year-over-year in US dollars and up 22.4% in local currency. Net income attributable

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top