We Like Culp as New CEO of GE
We expect the firm's core strategy will remain unchanged but do expect to changes in execution.
Joshua Aguilar: While we were certainly not expecting the firing of GE's John Flannery this morning, one thing we're not surprised by is the selection of Larry Culp. Culp is the individual we had in mind to replace Flannery in case the board was not pleased with Flannery's progress, as we indicated in a June note. We think the board is sending a signal to the market that everyone will be held accountable, even the CEO. Our take is that the board was frustrated with Flannery's lack of progress with taking cost out in the power division. GE was consistently targeting a return to 10% segment profit margins for the segment, but segment profits margins have hovered at about 4.7% over the past two quarters and sustained similar levels during 2017.
We like the choice of Larry Culp. Under his leadership, Danaher's stock rose five-fold in Culp's 14 years at the helm. While we were previously cautiously optimistic during Flannery's 14 months in charge of GE, we like that the board is going in a new direction with fresh new ideas. We don't anticipate that Culp will radically depart from the focus on aviation, power, and renewable energy. This is the same board that ultimately approved of the end of June 8-k filing this year.
Joshua Aguilar does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.
Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
We’d like to share more about how we work and what drives our day-to-day business.
We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.
How we use your information depends on the product and service that you use and your relationship with us. We may use it to:
To learn more about how we handle and protect your data, visit our privacy center.
Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.
To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.
Read our editorial policy to learn more about our process.