General Electric (GE) reports quarterly earnings Thursday. Analysts expect revenue of $32.67 billion and eps of $0.22. A lot has changed over the past several months. In June 2018 GE announced a major restructuring to create a simpler, stronger industrial company. NewCo will now focus on Aviation, Power and Renewable Energy. The other businesses, such as Transportation, Baker Hughes (BHGE) and Healthcare are being sold off or separated as standalone businesses.
Proceeds from asset sales will be used to pare GE’s massive $115 billion debt load. The problem with asset sales is that GE will forego future earnings and cash flow from divested properties. The company will likely be left with the dregs of the business that have lower growth prospects.
NewCo’s Q3 Results Were A Disaster
NewCo’s Q3 2018 results were disastrous. Revenue of $16.1 billion was down 9% Y/Y. Over 35% of NewCo’s revenue was derived from Power Systems, which fell 33% Y/Y. Read more: