General Electric Co. soared after shocking investors by naming Larry Culp chief executive officer and chairman, as the company ousted John Flannery amid a severe share decline.
The company said it would fall short of its previously indicated guidance for free cash flow and earnings per share for 2018 due to weakness in its power business. GE also said it will take a non-cash goodwill impairment charge of "substantially all" of GE Power's current goodwill balance of about $23 billion.
Culp was CEO and president of industrial manufacturer Danaher Corp. from 2000 to 2014.
Larry Culp, a GE board member who ran United States manufacturer Danaher for more than a decade, is to replace GE veteran John Flannery, effective immediately.
The shares climbed 15 per cent to US$12.95 in NY premarket trading Monday.
In the press release, Mr. Culp said, "GE remains a fundamentally strong company with great businesses and tremendous talent".
The company's power business, hit by problems with its latest generation of gas turbines, posted a $10 billion loss previous year.
Culp's time as CEO of Danaher was marked by expanding the reach of the company into fields as diverse as dental imaging and water filtration. The stock has more than halved since Flannery took the top job in August past year.
Flannery replaced Welch successor Immelt, himself pushed out earlier than expected last summer after nearly 16 years at the top. The company was also forced to cut its dividend in half and uncovered massive insurance-related losses under Flannery's watch, as the company struggled to transform its focus. Thomas Horton was named lead director.
GE cited "weaker performance in the GE Power business" as one reason for the change at the top.
'We remain committed to strengthening the balance sheet including de-leveraging'. 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. "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".