General Electric Chief Executive Officer Larry Culp had a lot on his plate during the company's 2019 outlook presentation on Thursday.
Once the biggest public company in the United States, GE has shed more than $200 billion of market value since 2017. Its stock was booted from the blue-chip Dow Jones Industrial Average last year, and its accounting is under federal investigation. The formerly sprawling industrial giant is being dismantled piece by piece.
For Culp, with billions of dollars and the fate of an American crown jewel in his hands, managing investor expectations is at the top of his priority list. And it looks like it's starting to work.
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.
But Thursday morning selling in GE shares was contained. Nobody panicked. In fact, the stock ticked lower in premarket trading but then shot back into positive territory, up 4 percent at mid-morning and adding to a 10 percent gain since last week.
Culp's step-by-step effort to keep shareholders in the loop, disclosing just as much information as he can without setting the bar too high, appears to have soothed some nerves and softened stock fluctuations. On every call he makes, there are so many constituencies," said RBC's General Electric analyst Deane Dray. "It's the investment community and it's all the internal – the employees – he needs to make sure he wins their hearts and minds, instill confidence."
"You can hear it in his voice," Dray said.