GE stock drops as profit misses, CEO cuts forecast

General Electric Co`s third-quarter profit missed Wall Street estimates by a wide margin on Friday and the industrial conglomerate slashed its earnings forecast, sending the year`s worst-performing Dow stock down another 6 percent.

The results signaled the depth of problems confronting new Chief Executive John Flannery as he tries to make the 125-year-old company more consistently profitable. GE recently gave a board seat to activist investor Trian Fund Management, and Flannery is due to reveal his restructuring plan and reset financial targets on Nov. 13.

"We`re still waiting for his blueprint," said Deane Dray, analyst at RBC Capital Markets. He said GE`s financials will take a back seat to cost cutting, dividends, earnings quality and portfolio changes expected to be part of Flannery`s plan.

GE reported adjusted profit of 29 cents a share compared with the 49 cents a share analysts had expected, according to a consensus of estimates from Thomson Reuters I/B/E/S.

GE cut its profit forecast for the full year to $1.05 to $1.10 a share, from $1.60 to $1.70 previously, and said it would generate about $7 billion in cash from operations, down from $12 billion to $14 billion it had forecast earlier. It left its dividend unchanged.

GE shares, part of the Dow Jones Industrial Average, were down 6.7 percent at $22.00 in premarket trading.

GE said weak performance in its power and oil and gas businesses, goodwill impairment and higher-than-expected restructuring costs were the main causes of the profit decline.

GE`s "solid" performance in other businesses "was offset by a decline in power performance in a difficult market," Flannery said. Industrial cash flow from operations fell mainly "because of lower power volume, resulting in lower earnings and higher inventory.”

Profit at GE`s power business, which makes power plants and related equipment, fell 51 percent in the quarter.

Excluding items, industrial cash flows from operating activities was $1.74 billion in the third quarter ended Sept. 30, down from $2.90 billion, a year earlier.

The company reported a 14.4-percent rise in revenue to $33.47 billion, boosted by the acquisition of oilfield services provider Baker Hughes.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)