It is hard to imagine GE (NYSE: GE) ever replacing or cutting the power of its CEO, Jeff Immelt, but the press is mentioning these alternatives ahead of the company's Q2 earnings report. According to The New York Post, "Jeff Immelt, the embattled GE chief executive, has got six months to save his skin."
GE's Q1 earnings were below Wall Street estimates and the only segment of the company which did really well was its huge infrastructure division. Investors question whether the most recently quarter will be any better, especially with a slowing economy.
GE's stock is already down from a 52-week high of $42.15 to its current price of $26.91. Over the last year, the stock is down 30% compared to the Dow, which is off 17%.
GE still faces the problem that many of its shareholder think it is too big to manage and is in too many businesses. Added to that may be trouble growing overseas which the company is counting on to drive revenue. With the some economic problems spreading to the developing world that is hardly a lock.
If GE can't deliver when it announces its next set of numbers, the shares are likely to move closer to $20.
Douglas A. McIntyre is an editor at 247wallst.com.
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Reader Comments (Page 1 of 1)
7-07-2008 @ 7:34AM
Bob Baldwin said...
The latest "Overseas" investment for GE is The Weather Channel! (Well, I guess they do report on the weather over there.) I don't know what others do on that channel, but I watch it for the local weather forcasts, not to see what I can spend money on today. I wonder when advertisers will realize that their internet ads are ignored at best and resented at worst for cluttering up the screen and delaying the transmission.
7-07-2008 @ 8:44AM
Bruce E Warnock said...
Doug,
You know from our past postings that I feel Immelt has long outlived his welcome. The decline of the stock price from $60 in the year 2000 to its paltry price now speaks volumes. I would not wait until year-end to make the change.
It is also long past time for the Board to separate the positions of CEO and Chairman of the Board, so Immelt's successor at least has a "boss" to report to.
GE is a great company suffering from lackluster senior management and they need to return to their roots with new and innovative leadership. They will return to glory but not overnight. A new CEO will be a step in the right direction.
7-07-2008 @ 11:20AM
Tattletale said...
Amen to everything Bruce Warnock says.......good job.