Several months after it was kicked out of the DJIA, GE shares touched their lowest levels since the financial crisis last week while the rest of the market has surged to fresh record highs. And with the company searching for something, anything, to pull shares out of their more than a decade-long slump, the board announced the departure of CEO and Chairman John Flannery Monday morning. Flannery, who had led the company for just 10 months after replacing longtime CEO Jeff Immelt, will himself be replaced by board member Lawrence Culp, former CEO of Danager Corp from 2000 to 2014. In addition, Thomas Horton will take over as lead director.

But that wasn’t all: The company issued a “kitchen sink” announcement, disclosing that it would miss its 2018 earnings guidance and would take a massive $23 billion charge in the company’s struggling power business – effectively writing down all of the unit’s Goodwill – which has recently been the source of most of the company’s woes. According to CNBC, the board was unsatisfied with Flannery’s “execution” since taking over.

  • *GE SAYS WILL FALL SHORT OF 2018 EPS GUIDANCE; TO RECORD CHARGE
  • *GE NAMES LAWRENCE CULP CHAIRMAN & CEO
  • *GE SAYS WILL FALL SHORT OF 2018 EPS GUIDANCE; TO RECORD CHARGE
  • *GE: CHARGE TO BE SUBSTANTIALLY ALL OF GE POWER’S $23B GOODWILL
  • Shares initially sunk, then snapped higher on the news, rallying 15%:

    According to the statement, the impairment charge constitutes “substantially all” of the goodwill balance from GE’s power unit.

    “While GE’s businesses other than Power are generally performing consistently with previous guidance, due to weaker performance in the GE Power business, the Company will fall short of previously indicated guidance for free cash flow and EPS for 2018. In addition, GE expects to take a non-cash goodwill impairment charge related to the GE Power business. GE Power’s current goodwill balance is approximately $23 billion and the goodwill impairment charge is likely to constitute substantially all of this balance. The impairment charge is not yet finalized and remains subject to review. The Company will provide additional commentary when it reports third quarter results.”