GE's closely watched cash flow from operations fell 67 percent to $3.6 billion from a year earlier, reflecting the loss of the appliances division, which the company has sold.
Net profit slumped 58 percent to $1.34 billion, or 15 cents a share, in the quarter ended June 30, from $3.30 billion, or 36 cents a share, a year earlier.
"We've reduced our Industrial structural costs year to date by $670 million and we are on track to meet or exceed our $1 billion cost reduction target for the year," Immelt said in the earnings statement.
"The global scale of the company, along with our ability to innovate industry-leading products and services, will help us navigate the current environment and unlock productivity across our businesses and markets."
GE said earnings are likely to end the year at the bottom end of its projected range at $1.60 a share to $1.70 a share. The company did not update its 2018 outlook but said Flannery will provide an update on GE's 2018 forecast later in the year.
On Friday, CFRA placed GE on a "hold" rating and cut its 12-month price target to $27 from $36.
"While Q2 EPS ($0.28 vs. $0.51) beat our estimate by $0.03, guidance indicated a less robust outlook for the second half," the firm said.
The earnings report came one month after GE announced that Immelt will step down, a management shake-up that many analysts had expected after activist investor Nelson Peltz pressed for deeper cut costs and more profits.
Peltz's Trian had the largest GE stake at 0.79 percent as of March 31, according to S&P Global Market Intelligence. Trian is one of the top 15 investors overall in GE.
Flannery, current president and CEO of GE Healthcare, becomes CEO of the corporation on Aug. 1 and succeeds Immelt as chairman on Jan.1.
After the earnings statement, GE shareholder Jack DeGan told CNBC that GE's new chief will likely be less ambitious at first.
"Usually when a new CEO comes in, especially after a long-standing previous CEO, they want to lower the bar because that's where their starting point begins," DeGan, chief investment officer at Harbor Advisory, said on "Squawk Box."
In his statement, Immelt said: "We're looking forward to a smooth transition of the CEO position on August 1, when John Flannery becomes CEO. ... I am as confident as ever that John is going to be an outstanding leader of this great company."
—Reuters contributed to this report.