General Electric Chief Executive Officer Larry Culp had a lot on his plate during the company's 2019 outlook presentation on Thursday.
Culp, on the job less than six months, has to try and win back the confidence of GE shareholders and employees and calm its detractors, and the numbers aren't helping. On Thursday, he projected 2019 earnings per share would come in between 50 cents and 60 cents, below the 70 cents Wall Street had expected. He also put details on a prediction he made last week: GE's cash flow this year will either be unchanged or or turn negative by as much as $2 billion.
Culp's track record as CEO of the science and technology conglomerate Danaher, where he more than quintupled market value and revenue over a decade, was supposed to give investors hope, but some remain unconvinced. GE is a much larger company, with revenue north of $120 billion and almost five times as many employees.
The relative calm in the stock after the disclosure could be because Culp had already prepared investors by saying last week the number would be negative, without specifics. The forecast that cash flow would turn positive in 2020 and pick up more momentum in 2021"is the biggest positive disclosure, in our view," Dray said in a note to clients.There is perhaps no CEO better equipped or better practiced at managing steep investor expectations than Apple's Tim Cook. Between a devout customer base, a hard-to-please investor pool and a one-of-a-kind predecessor, Cook had his work cut out for him on Day One in 2011. And it hasn't gotten any easier.
Despite the fact that Apple had topped Wall Street profit estimates in 19 of the last 20 quarters, shares sank nearly 10 percent the day after the disclosure and drew a deluge of worrisome analyst notes. Analysts from Jefferies and Macquarie each threw in the towel and downgraded the stock to a neutral rating from buy."The bottom line is that we are late , but we can no longer recommend Apple," Macquarie added.
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