General Electric may spin-off transportation business to salvage itself

A huge round of applause for people who are still holding on to the General Electric (GE) stock – either you are amazingly stubborn or stubbornly amazing. These people have had it all — from stock falling almost 56% to $13, to dividends being cut by half. And yet, they have kept their faith strong in CEO John Flannery, who had vowed in October of turning the company around by selling assets worth $20 billion.

But the CEO seems to be more inclined to salvage the company in ways that are beneficial to the unshaken investors. According to a report on Wall Street Journal, the industrial mammoth is planning to spin off or publically offer its transportation arm to shed its complex operating structure. The report adds that the Boston-based company has been looking into ways to jettison its transportation unit for the past six months.

GE is apparently mulling hybrid deals and mergers with smaller companies so that shareholders are awarded ownership in various public-listed firms.

The transportation unit, which makes equipment for marine, railroad and mining industries, is valued at around $7 billion, though it has not seen much growth in the past few years. In 2017, the unit generated revenue of approximately $4.18 billion.

The 125-year-old company had earlier in February noted that it is on a path to shed assets worth $4 billion. This was followed by an announcement that it would sell an IT unit belonging to its healthcare arm to private equity firm Veritas Capital for $1.05 billion in cash.

GE is apparently mulling hybrid deals and mergers with smaller companies so that shareholders are awarded ownership in various public-listed firms. 

Restated results

General Electric had earlier stated that it would publish restated results for the years 2016 and 2017 to reflect new accounting standard. This is expected to be out by Friday. Also, the conglomerate’s first quarter earnings is scheduled to be published on April 20.

GE stocks are down over 25% year-to-date.