General Electric is getting hit for a 2nd straight day after announcing its turnaround plan

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Markets Insider

  • Shares of General Electric are down 4.26% at $18.21 as selling continues following Monday’s release of the company’s turnaround plan.
  • GE shares have fallen more than 10% since the plan was released.

Shares of General Electric are seeing follow-through selling on Tuesday, trading down 4.26% at $18.21 a piece. The losses come after shares tumbled more than 7% on Monday in response to the company’s turnaround plan.

CEO John Flannery doesn’t seem to be too worried about the selling on Wall Street.

“I’m not trying to run the company for the reaction on Monday and Tuesday or Wednesday of this week,” he told CNBC’s Squawk on the Street. “We have a long-term plan.”

GE announced it was slashing its dividend by 50% and implementing other cost-cutting measures to turn things around. Shares had slumped about 35% this year before Monday’s slide. More than $100 billion in market value has been wiped out this year.

In addition to its cost-cutting measures, GE forecast full-year 2018 adjusted earnings of $1 to $1.07 a share, well below the $1.18 that Wall Street was expecting. It also said it expects revenue growth of 0% to 3% in 2018 and that it will target 2% to 4% long-term organic revenue growth.

The plan has received a lukewarm reception on Wall Street with RBC downgrading GE shares following the plan’s release.

Flannery says investors should invest in the future of the company.

“I would say the outlook for the company over three to five years, what we laid out, growing cash and earnings in three to five years, that’s what someone should buy,” Flannery added. “So is it going to be immediate, is it going to happen in two months, four months, six months? No, there are operational things we need to change in the company.”