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UPDATE 6-GE shares fall as profit slumps, investors await new CEO's targets

* 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 3 percent after touching 2-year low (Adds analyst comments)

July 21 (Reuters) - General Electric Co's shares dropped sharply on Friday after it posted a 59-percent decline in second-quarter profit and put off an expected cut to 2018 earnings targets until November, when new CEO John Flannery will be four months into his job.

The maker of power plants, jet engines, medical scanners and other industrial equipment said profit and sales declines largely reflected sale of its appliances business.

It beat analyst expectations on adjusted profit, but cash flow was weak and GE said full-year profit and cash flow will be at the low end of its forecasts.

GE also 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, already suggesting a significant cut.

The length and scope of the review raised concern, since GE has just come through major shifts in its portfolio.

"It's discouraging that we're going to wait again for the company to perform as we wait for the new CEO to review everything," said Jim Corridore, analyst at research firm CFRA, which cut GE shares to "hold" after Friday's results.

Incoming CEO Flannery acknowledged on a conference call that his review would take time, but said it had not altered GE's 2017 outlook.

Still, the stock could be in "in a state of limbo" until the review is finished, Deane Dray, analyst at RBC Capital Markets, said in a note.

GE's cash flow was below expectations and also weighed on the stock, said Jeff Windau, analyst at Edward Jones. "People want to get the answers sooner" to Flannery's review.

Shares were down 3 percent at $25.87 in mid-morning trading after earlier hitting a 2-year low.

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.

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 France's Alstom , merged GE's oil and gas business with Baker Hughes, and moved the headquarters to Boston.

Flannery said he is "in the middle of a series of deep dives into the businesses." He also is "taking a hard look at our corporate spending" to ensure it contributes to earnings, and on a listening tour of investors.

GE has cut $670 million in industrial overhead costs 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. 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)