After a brief respite in the early morning hours as GE raised its guidance, shares in the beleaguered company are tumbling once again on a statement that the firm is under investigation by the SEC.
As Bloomberg reports, General Electric said it’s under investigation by the U.S. Securities and Exchange Commission after taking a $6.2 billion charge related to an old insurance business. The company said it’s cooperating fully with the probe, which is in the early stages.
“We’ve been notified by the SEC that they are investigating the process leading to the insurance-reserve increase and fourth-quarter charge, as well as GE’s revenue recognition and controls for long-term service agreements,” GE Chief Financial Officer Jamie Miller said Wednesday on a conference call with analysts and investors.
The result is that early gains are gone…
Beforee detail sof the SEC investigation slammed the stock, Reuters reports that the stock was higher in part on investor relief that the company reaffirmed its 2018 profit forecast, RBC Capital Markets analyst Deane Dray said in a note to clients.
“Some short-covering could be triggered just on the news that GE reaffirmed 2018, but the gravity of its operating challenges — especially at Power — are likely to continue to pressure the stock over the near-term,” he wrote.
GE kept unchanged its recent forecast for 2018 earnings of between $1.00 and $1.07 a share, which contrasts markedly with $2 a share that Immelt had promised before being replaced as CEO in August.
But, we leave you with General Electric CEO’s comments which seem to sum things up nicely…
“There will be a GE in the future… but it will look very different”
Smaller? Bankrupt? Broken-Up?
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