General Electric (GE) announced Monday morning that John Flannery, who was named chairman and CEO in August 2017, will be replaced immediately by H. Lawrence Culp, Jr. In a press release announcing the move, GE also said it would be taking a $23 billion non-cash charge for its power business and will miss profit expectations for 2018.
The removal of Flannery, after only 13 months on the job signifies the struggles the former industrial and financial giant has had transforming its business and shedding assets. GE's stock, once considered a blue-chip must-own for global investors, is at multi-year lows as it has fallen out of favor with investors.
Culp, who joined GE's board of directors in April of 2018, was the former CEO of Danaher Corp. from 2000-2014. According to GE's press release, Culp led Danaher to increasing its free-cash flow five-fold during his tenure. GE is hoping he will continue the process of shedding non-performing assets and deleveraging the company's balance sheet.
In the press release, Culp said, “GE remains a fundamentally strong company with great businesses and tremendous talent. It is a privilege to be asked to lead this iconic company. We will be working very hard in the coming weeks to drive superior execution, and we will move with urgency. We remain committed to strengthening the balance sheet including deleveraging."
GE is scheduled to report earnings October 25 before the market opens. Analysts surveyed by Zack's are expecting the company to report a profit of $0.22 per share, lower than the $0.29 earnings per share the past quarter.