Tomahawk, WI 01/21/2014 (BasicsMedia) – General Electric Company (NYSE:GE)’s Chief Executive Officer Jeffrey Immelt could not raise profits like the previous years, causing the company to face the steepest downfall in seven months. GE reportedly was second among the declining industrial companies in the Standard & Poor’s 500 Index, with a drop of 2.3%, down to $26.58.

CEO’s goals and strategies

CEO Immelt had set a goal of improving its industrial businesses operating margin by 0.7 percentage points in December 2012 and acknowledged last month. To achieve that, the company focused on cutting costs, taking $1.6 billion of cost out, reducing its Capital size and returning $18 billion to the shareholders but in the end, the company came up short, posting an improvement of only about 0.66 percentage points against the set 0.7 percentage points.

The main reason that is being stated for GE’s share downfall despite the profits is its failure to meet the expectations. Immelt’s strategy of focusing on growing by cutting down on the financial unit of the company did not come out as a very wise step. The company reported a 20% jump in its fourth-quarter profit, with oil and gas businesses leading the way with 24% better profit. Supply chain disorder at the company’s wind turbine business as also unfavorable outcomes at the energy management business set growth at a distance.

GE units’ results

GE Capital the finance unit also generated sales of $11.1 billion which is around 4.5% lower than a year earlier. Profit increased by 38% up to $2.49 billion. Aviation profits increased by 13% and reached $6.17 billion. At the oil and gas unit, sales increased by 17% to $5.31 billion. The power and water division however showed little changes at $7.69 billion.

Healthcare seemed to be a concern, with orders down 1% at $5.4 billion but the company saw a turnaround in the transportation segment where profit surged by around 7%. The company ended the quarter with order backlog at a record $244 billion, up $15 billion from the third quarter.

CEO Immelt’s claim that they ended the year with momentum was doubted by the stock market as the price of GE stock declined. GE announced its fourth quarter results yesterday which showed 20% rise but it did not meet the expectations set by Jim Ibbelt a year ago.

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