* Q2 profit and revenue top Wall St estimates
* GE sees 2017 profit, cash flow at low end of forecast
* Analyst: stock 'in a state of limbo' ahead of new targets
* Shares down 4.1 pct in early trading (Adds details about CEO transition, portfolio review)
July 21 (Reuters) - General Electric Co's profit fell nearly 60 percent in the second quarter and it put off an expected "reset" of 2018 earnings targets until November, sending shares down sharply.
The maker of power plants, jet engines, medical scanners and other industrial equipment said its profit and sales declines largely reflected sale of its appliances business, and it affirmed its full-year forecast for cash flow, profit, revenue and operating margin. However, it expects full-year profit and cash flow to be at the low end of its forecasts.
GE said it would update its 2018 earnings target of $2 a share in November, later than analysts had expected. Analyst consensus 2018 estimate is $1.73, according to Thomson Reuters I/B/E/S.
"Until this earnings reset plays out, the stock will essentially remain in a state of limbo," Deane Dray, an analyst at RBC Capital Markets, said in a note.
Incoming CEO John Flannery acknowledged his review would take time, but it was under way and wasn't altering GE's operations or 2017 outlook. "I'm not worried that we're going to be dead in the water in the meantime," he said.
Shares were down 4.1 percent at $25.58 in early trading.
GE faced a "slow-growth, volatile environment" in the quarter, Chief Executive Jeff Immelt said in his final earnings release before his Aug. 1 retirement, when GE healthcare chief Flannery takes over.
Immelt's tenure began days before the Sept. 11, 2001, terrorist attacks and included the 2008 financial crisis. While GE stock is 27 percent below its price when Immelt arrived, it has more than tripled from its nadir in 2009.
Immelt sold off NBCUniversal, appliances and most of GE Capital. He acquired power assets from Alstom of France, merged GE's oil and gas business with Baker Hughes, and moved the headquarters to Boston.
Flannery's review could change GE's portfolio and strategy. GE is "in the middle of a series of deep dives into the businesses," Flannery said on a conference call with analysts. "We also are taking a hard look at our corporate spending" to ensure it contributes to earnings.
GE has cut $670 million in industrial overhead costs so far this year, Immelt said, and will "meet or exceed" its $1 billion target for 2017 - a goal set after discussion with activist investor Trian Fund Management.
GE was under pressure to report strong cash flow after a weak showing in the first quarter that included an unexpectedly large $1.6 billion outflow of cash due to slow customer payments and failure to deliver some power plant equipment.
Cash flow from operations totaled $3.6 billion, up from $400 million in the first quarter. The figure was down 67 percent from a year ago, partly reflecting the loss of contributions from the appliances division.
Revenue fell 12 percent to $29.56 billion, slightly above the $29.02 billion consensus estimate of analysts polled by Thomson Reuters I/B/E/S. GE said its appliances sale eliminated $3.1 billion of revenue.
Net profit slumped 59 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.
Adjusted earnings fell 45 percent to 28 cents a share, compared with estimates for 25 cents. (Additional reporting by Rachit Vats in Bengaluru; Editing by Bernadette Baum and Nick Zieminski)