General Electric Co Chief Executive Officer John Flannery stepped down on Monday after a year in charge as the company announced a US$23 billion charge related to its power business.
The industrial conglomerate also said it will miss previously provided guidance for free cash flow and earnings per share in 2018, because a weak performance in its power business offset in-line performances in its other businesses.
Flannery on the same day said that GE might take the radical step of splitting up the main company's three main components - aviation, health care and power - into separate businesses.More news: Tweet storm: Musk quits as chairman over false claims
"Investors will view the change favorably given Culp's successful CEO tenure at Danaher, his GE "outsider" status, and the fact that Culp doesn't "need" the position, having already completed a lucrative & reputable career".
The shares climbed 8.2 percent to $12.22 in NY premarket trading Monday.
In hiring Mr. Culp, 55 years old, GE brought in a leader who ran what some investors saw as a model industrial conglomerate. "I am excited to get to work".More news: California passes net neutrality law, Trump administration sues
"GE remains a fundamentally strong company with great businesses and tremendous talent", Culp said in the statement, adding that management will move "with urgency" to executive its plan. Those included the purchase of French gas-turbine maker Alstom, which GE bought in 2015 for more than $14 billion. GE had fallen 35 percent this year through September 28, following a 45 per cent decline in 2017. So, by putting an end to Flannery's almost 2 year tennure at the company and bringing a trusted leader on board to replace him, the company has excited investors.
General Electric head John Flannery is out after just more than a year at the top of the company. The company has been forced to sell off divisions and lay off employees, a process that accelerated under Flannery.
Last week the company's market value fell below $100 billion for the first time since March 2009.More news: Third-gen Chromecast sold early by Best Buy
'We remain committed to strengthening the balance sheet including de-leveraging'. "However, we believe that CEO Culp will, at a minimum, re-baseline the company, drive execution and make long-term decisions that benefit the company and shareholders".