Time Is Not On GE’s Side
If GE’s core operations were strong or improving, then Tchir’s argument could make sense. GE’s core operations – Aviation, Power and Renewable Energy (“NewCo”) – are currently in disarray. NewCo’s Q3 2018 revenue of $16.1 billion fell 9% Y/Y. It followed a 9% decline in Q2. Power was supposed to be the key catalyst for NewCo. Its revenue of $5.7 billion fell 33% Y/Y. Power represents about 35% of NewCo’s total revenue, and its operations are being disrupted by alternative energy.
Moody’s recently downgraded GE to notches, but still at investment grade status. CEO Larry Culp has been hiving off assets to get the company’s debt pile down. Another downgrade could sink GE’s business prospects, and it could be inevitable. Read more:
[…] the collapse of Venezuela. I think the run on the bank at GE is particularly important. It puts GE on the road to junk status. Secondly, GE’s $115 billion debt load would represent about 10% of the $1 […]