GE posts steep loss, faces US probe on accounting

New York: General Electric disclosed on Wednesday that it faces a accounting probe by US regulators, as it reported a nearly $10 billion loss in the last quarter due to charges linked to its insurance business and US tax reform.
The news of the probe of the massive charges in the insurance business cast another shadow over the troubled industrial conglomerate as it tries to right the ship.
The quarterly results showed continued weakness in the power division, offset by much better market conditions in aviation and health care where operating profits grew.
And GE pointed to progress in cutting costs and said improved execution had lifted the company’s cashflow, a closely-watched Wall Street benchmark.
“We have a long way to go, but the mission is clear and we’re moving forward together as one team with purpose,” chief executive John Flannery told analysts on a conference call.
GE reported a fourth-quarter loss of $9.8 billion due to hefty charges linked to its insurance business and US tax reform, compared to profits of $3.5 billion in the same quarter of the prior year. Revenues in the fourth quarter were $31.4 billion, a five per cent decline.
The huge charges pushed annual results into a $6.2 billion loss, compared with $9.2 billion in profits in 2016.
A major weak spot has been GE’s power business amid tepid demand for gas turbines as renewable energy has taken more capacity globally.
— Reuters