“The results I’m about to share with you are completely unacceptable,” CEO John Flannery said on a conference call with investors Friday.
After stripping out restructuring charges, GE earned 29 cents per share from continuing operations in the third quarter, down 9 percent from the same period a year earlier. Analysts surveyed by Thomson Reuters expected the company to earn 49 cents per share.
The earnings miss reported by GE is the company’s biggest in at least the last 17 years, according to Bespoke Investment Group. Prior to Friday’s report, the company’s biggest miss relative to Wall Street expectations was just 7 cents in April 2008, according to Bespoke’s Paul Hickey.
Flannery is considering extensive cost-cutting measures at GE as the company reevaluates its businesses. GE is now seeking to cut $2 billion in costs next year, up from the $1 billion in cost-cutting previously announced.
“Everything is on the table and there are no sacred cows,” Flannery said.
The company is in the process of finalizing its 2018 financial outlook, and says it will unveil any changes to its dividend in November. As part of that review, the company is reviewing sources of cash in this year and next.
“The dividend is a priority in our capital allocation framework and we understand its importance to our investor base,” Flannery said.
When asked about whether he believes the current dividend is sustainable for GE, Flannery said the company “still has some moving pieces,” repeating again that a decision will be announced next month.
“We are driving sweeping change and moving with speed and purpose,” he continued. “Things will not stay the same at GE.”
This was the first earnings report under Flannery, who replaced Jeff Immelt in August.
In an exclusive interview following the earnings report, Flannery will be on CNBC’s “Squawk on the Street” at 10 a.m. EDT. This will be Flannery’s first interview since becoming chairman and CEO.
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