Healthcare is one of a core of businesses that industrial conglomerate GE plans to focus on in the coming years as the struggling industrial giant restructures, according to a November 13 presentation to investors by chairman and CEO John Flannery.
Once known for a sprawling corporate empire that ranged from media to microwaves, GE now plans to focus on a smaller group of industries "with a renewed focus on healthcare, aviation, and energy," according to an article by CNBC. On the chopping block could be longtime GE fixtures such as lighting and locomotives.
GE has been mired in cash-flow issues and released disappointing financial results for its third fiscal quarter, although its GE Healthcare business saw revenues grow 5% and operating profit rise 14% for the period. In late October, Reuters reported that the company might sell off its healthcare IT business.
As part of Flannery's efforts, GE announced plans to cut its quarterly dividend in half, from 24¢ a share to 12¢ a share, as a step to conserve cash. Shares in the company fell 7% in response that day as investors digested the news.
Flannery characterized GE Healthcare -- which he led before taking over GE's helm from previous CEO Jeffrey Immelt -- as "delivering for investors." The division has "doubled down" on the life sciences segment and has invested more in its ultrasound business. Operating profit margins have climbed from 16.3% in 2015 to 17.3% in 2017, and they are headed upward in 2017 and 2018, according to slides that accompanied his November 13 presentation.
