General Electric Co. soared after shocking investors by naming Larry Culp chief executive officer and chairman, as the company ousted John Flannery amid a severe share decline.
The industrial conglomerate also said it will miss previously provided guidance for free cash flow and earnings per share in 2018, because a weak performance in its power business offset in-line performances in its other businesses.
GE Power's current goodwill balance is about $23 billion and the goodwill impairment charge is likely to constitute substantially all of this balance, the company said.
The shares climbed 15 per cent to US$12.95 in NY premarket trading Monday. It is a privilege to be asked to lead this iconic company, ' Culp said in the company's statement.
While noting that while Culp has work to do, "I wouldn't want to bet against Larry", Davis added.
In the press release, Mr. Culp said, "GE remains a fundamentally strong company with great businesses and tremendous talent".
Also on Monday, GE announced a $23 billion good will impairment charge related to its struggling power business. So, by putting an end to Flannery's almost 2 year tennure at the company and bringing a trusted leader on board to replace him, the company has excited investors.
GE's share price suffered under Flannery, falling more than 50 percent since he took over last August.
Flannery vowed to give GE more of a high-tech and industrial focus by honing in on aviation, power and renewable energy - businesses with big growth potential.
GE, however, has not seen such gains, particularly when it comes to its power business which was hit by problems with its latest generation of gas turbines and posted a $10 billion loss past year. The company also shrank its board and pushed out a raft of directors who served under Immelt.
Last week the company's market value fell below $100 billion for the first time since March 2009.
Culp, 55, ran Danaher from 2000 to 2014 in what investors and analysts view as one of the best turnarounds among multi-business industrial companies. We remain committed to strengthening the balance sheet including deleveraging.