US engineering heavyweight General Electric has suffered from a period of weakness in its key power, oil and gas businesses. It’s also facing investigations over a big charge in its insurance segment.GE reported a fourth-quarter loss of $9.8 billion (€7.9 billion euros) on Wednesday, compared with a $3.5-billion profit in the same quarter a year earlier.
The company experienced increasing problems in its power, oil and gas businesses amid tepid demand for gas turbines as renewable energy had taken more capacity globally.
By contrast, the aviation and healthcare divisions showed a strong performance, but were only partly able to offset the negative results in the power segment, the company said.
GE’s executives had already announced a major restructuring initiative in November of last year, followed up with 12,000 job cuts in the power unit in December.
Added irritation
US regulators are currently investigating General Electric over a hefty charge in its insurance business that contributed to the fourth-quarter loss.
The Securities and Exchange Commission (SEC) is looking into “the process leading to the insurance reserve increase and the Q4 charge,” regulators said in a statement.
On January 16, GE disclosed it would book $6.2 billion in one-time costs after determining the insurance business needed additional reserves following a review.
The news rattled investors, who had thought the new leadership team at GE had uncovered major problems as it struggled to put a turnaround plan into practice.
hg/jd (AP, AFP)
