Shares of General Electric gained as much as 17 percent on Monday, benefitting exchange-traded funds (ETFs) with the largest holdings of GE after the company reported better-than-expected fourth-quarter earnings.
Earnings per share of 17 cents was less than the 22 cents expected, but revenue came in at $33.28 billion versus the expected $32.6 billion Wall Street forecast.
Last year, GE shares dropped to their lowest level in close to a decade as it underwent deep regulatory accounting investigations while new CEO Larry Culp struggled to revive the once-heralded corporation.
“Our strategy is clear: de-leverage our balance sheet and strengthen our businesses, starting with Power,” said CEO Larry Culp in a statement. “We have more work to do, but I’m encouraged by the changes we’re making to strengthen GE and create value.”
ETFs with the largest holdings of GE were higher on the earnings report, such as Davis Select US Equity ETF (NasdaqGM: DUSA), Oppenheimer S&P Ultra Dividend Rev ETF (NYSEArca: RDIV) and SPDR Kensho Clean Power ETF (NYSEArca: XKCP). DUSA was 1.46 percent higher, while RDIV rose 0.85 percent and XKCP gained 1.33 percent.
In July 2018, GE was delisted from the Dow Jones Industrial Average after over 100 years as one of its original members. Culp, who took the helm as CEO on October 1, has more than his work cut out for him.
“My priorities in my first 100 days are positioning our businesses to win, starting with Power, and accelerating deleveraging,” said Culp in a press release.
Culp’s predecessor, John Flannery, lasted just 14 months.
Related: General Electric CEO John Flannery On New GE Strategy
GE’s Fall From Grace
Last year, shares of GE took a hit when a turbine issue was purportedly discovered by one of its customers, energy company Exelon, citing an “oxidation issue” with the turbine’s fan blades at two plants located in Texas. As a result of the issue, the operation life of the turbines were compromised, forcing a shutdown of the plants, which apparently is not the first time this occurrence has taken place.
GE has experienced an unceremonious fall from grace since its days when its market value was close to $600 billion in August 2000. Since then, its value has nosedived, particularly after the financial crisis in 2009, but has come back to as much as $300 billion by December 2015.
Since then, however, GE is struggling to recapture investor confidence since January 2017 when its shares were trading at about $31 per share–the stock is currently trading at $10.36 a share as of 11:00a.m. ET.
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