General Electric's earnings statement this week may contain a fundamental change in the way the industrial conglomerate reports its accounting, a shift one Wall Street analyst says is long overdue.
"We believe new CEO Larry Culp has every intention of establishing a (2019) guidance framework that the company can actually achieve in what we believe would be a welcome relief after years of non-credible GE guidance, perpetual exaggerations, opaque disclosure and aggressive accounting," Gordon Haskett analyst John Inch said in a note to investors Monday.
However, the move to an earnings presentation based on generally accepted accounting principles could "shock" the market, Inch said. GE's earnings presentation currently does not include restructuring charges, which are often more than $1 billion per quarter. Inch said the practice has been "helping to inflate" GE's earnings.