GE’s management have referred to its power unit as an issue in its overall quarterly results performance, announced on Friday.

Revenues and profits tumbled in the power division, where the market for gas turbines remained weak and the company wrote down $1.2bn of assets. Profit in the division plunged 51 per cent overall.

The business suffered from “poor execution” that resulted in project delays, according to Jeff Bornstein, GE’s outgoing chief financial officer. GE is trying to fix the power division by cutting costs and replacing management. 
John Flannery
Bornstein, who will step down at the end of the month, said GE (NYSE: GE) had misread the power market, overinvesting in capacity that didn’t sell and not moving quickly enough to cut costs.

“We have a tough 2018 in front of us but feel optimistic about the business beyond that,” Bornstein said of the division.

Newly installed chief executive John Flannery (right) has vowed to turn things around, in terms of the problems besetting the overall business.

“It’s clear we need to make some major changes,” he said. “Our results are unacceptable to say the least.”

Flannery, who replaced Jeff Immelt over the summer, faced tough questions from analysts after GE reported lower third-quarter earnings and cut its full-year forecast. He added that a a comprehensive plan would be introduced on November 13 investor day for rousing growth at the 125-year-old company. He described 2018 as a “reset year.”

Net profit for the quarter ending September 30 was $1.8bn, down 9.7 per cent from the year-ago period.