GE Stock Soars After CEO John Flannery Unexpectedly Ousted

GE CEO John Flannery steps down

GE CEO John Flannery steps down

The company also shrank its board and pushed out a raft of directors who served under Immelt.

GE named Culp to replace Flannery as it warned the company would fall short of recent forecasts for cash flow and profit growth, citing the weak performance of its power division.

The profit disappointment and massive accounting writedown are just the latest in a long line of misses dating back to the leadership of Jeff Immelt, who led GE between 2001 and June of past year.

"The challenges that GE faces (high leverage; Power's cyclical, structural and operational challenges; etc) are not easily or quickly fixable". GE Power's current goodwill balance is approximately $23 billion and the goodwill impairment charge is likely to constitute substantially all of this balance. It is a privilege to be asked to lead this iconic company, ' Culp said in the company's statement. We will be working very hard in the coming weeks to drive superior execution, and we will move with urgency.

It remains committed to its spin-off strategy, he added.

"Tom and I will work with our board colleagues on opportunities for continued board renewal". In a statement on Monday, GE lauded Culp's tenure at Danaher and said that he "executed a disciplined capital allocation approach, including a series of strategic acquisitions and dispositions", among other activities. "I am excited to get to work".

Larry Culp has a proven track record in company transformation and delivering shareholder value.

"We are not sure if this news implies a radically different strategic plan than the one announced in June, given Mr. Culp's involvement at the time".

GE shares were trading at $12.60 shortly before 10.00am Eastern on Monday.

Recently, investors and other members of the financial community have been concerned about John Flannery's ability to lead GE as the company seems to be headed in the wrong direction.

Mr Flannery had been in the role for less than two years. Of course, our partners at Trade Ideas were the first to alert us to the gains. GE is hoping he will continue the process of shedding non-performing assets and deleveraging the company's balance sheet.

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