General Electric with 6.2 billion dollar debacle – share price loses 4% pre-market

General Electric is currently publishing an unscheduled horror story. GE’s subsidiary GE Capital is currently becoming a nightmare for the gigantic US industrial group, which is currently weakening anyway, and really don´t needs additional bad news. As the company is currently announcing officially, the subsidiary has to post additional burdens of 6.2 billion dollars for the fourth quarter (insurance problems). This would have resulted in reviews of the insurance portfolio.

GE points out that the examination of these problems has already been mentioned in recent quarters. Over the next seven years, GE Capital will have to spend a total of $15 billion on additional provisions. Therefore, GE Capital will not be able to pay dividends to its parent company GE for the “foreseeable future”. Quote:

“GE Capital to fund contributions and suspend dividend to GE for foreseeable future”

This means that earnings in the Group as a whole will be weaker in the next years than previously expected. On the other hand, the share still loses only a moderate 4% before the official trading begins in 30 minutes.

The GE Logo. Chart: General Electric Company / Public Domain

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