GE names new CEO; GE Healthcare still plans split from parent company
GE Healthcare still plans to separate into an independent company after General Electric named a new chairman and CEO, according to a report by CNBC.
The company on Monday, Oct. 1, announced former chairman and CEO John Flannery was removed from the position and H. Lawrence (Larry) Culp will take over those titles.
Due to GE Power’s “weaker performance,” the company isn’t expected to meet its indicated guidance for free cash flow and earnings per share this year, the company stated in a release. The company hopes Culp’s appointment will help change that troubling trend.
“Larry Culp has a proven track record in company transformation and delivering shareholder value. He is a strong leader with deep knowledge of industrials and technology, and an intense focus on execution, organization, and talent development,” newly-appointed GE lead director Thomas said in the release. “The board looks forward to working with (Culp) and his team to return GE to growth and long-term success. On behalf of the board, I thank (Flannery) for his significant contributions and long service to GE.”
However, a research equity analyst who spoke to CNBC speculated the change could hurt the planned move to spin off GE Healthcare into a separate, independent company by 2019. Last year, GE Healthcare brought in $3.4 billion in profit, accounted for 15.8 percent of GE’s total sales and has been "one of GE’s most consistent and least volatile performers," according to the report.
“GE's been struggling with shrinking profits in recent years, and its shares have lost more than half of their value over the past 12 months to $11.29 a share Friday,” the report stated.
GE's stock soared 16 percent in premarket trading Monday after Flannery's dismissal was announced.
Despite the speculation, GE Healthcare spokeswoman Jennifer Fox said the leadership change “does not change what’s happening at GE Healthcare and it plans to continue working toward separation from GE.”
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Danielle covers Clinical Innovation & Technology as a senior news writer for TriMed Media. Previously, she worked as a news reporter in northeast Missouri and earned a journalism degree from the University of Illinois at Urbana-Champaign. She's also a huge fan of the Chicago Cubs, Bears and Bulls.