General Electric (GE) has suffered from a decline in revenue and earnings in its key businesses. Over the past year, it has also appeared rather directionless. The company recently reported that four of its gas turbines had to be shut down due to a problem with turbine blades:
General Electric Co. said on Thursday that four of its flagship power turbines in the United States have been shut down due to a problem with turbine blades that was discovered at an electrical power plant in Texas owned by Exelon Corp.
The emailed statement to Reuters went beyond GE’s acknowledgement earlier Thursday that the problem had shut down only one turbine, known as the 7HA, but was likely to affect others.
I understand the problem was serious enough that it could cause GE to shut down the Exelon plant as a precaution. Worse is that it impacted GE’s HA product line which was expected to provide core growth for Power Systems going forward. We may not know the full effects of the shutdown until the company’s Q4 earnings results are released. I had the following questions on the latest goings on.
Is GE Sacrificing Quality For Profits?
In Q3 2017, GE’s Power Systems experienced a decline in revenue in the low single digits, while Transportation revenue declined by double digits. I took the performance as a sign the global economy is sagging, and GE’s $10 billion Alstom (OTCPK:ALSMY) (OTCPK:AOMFF) acquisition was not working out. Read more:
