GE dives after filings show it plans to restate 2 years of earnings
- GE said it will restate its last two years of earnings following the adoption of new accounting standards.
- The move comes after the company revealed it was under investigation by the Securities and Exchange Commission over its accounting practices in its insurance business.
- The company also nominated three members to its board, ahead of a shareholder meeting in April.
- View GE's stock price in real time here.
Shares of General Electric fell to their lowest level since July 7, 2010 on news that the company will restate its last two years of earnings due to the adoption of a new accounting standard, regulatory filings showed.
GE's stock dipped below $14 per share on Monday morning.
The company said its revised earnings report will likely show earnings per share that are lower than previously stated because the revised accounting standard will now include revenue from long-term contracts. The revised earnings report is estimated to result in a $0.13 drop in its earnings per share for 2016, and a $0.16 cut for 2017, Reuters reported.
GE is adopting new accounting standards following a Securities and Exchange Commission investigation into the the company's accounting of long-term service contracts. The move was precipitated by a recent insurance charge made by the company, which put regulators on notice.
The company recently took a $6.2 billion hit on its insurance business after a review of GE Capital's portfolio.
The company plans to shed some of its businesses like its lighting, locomotives, and oil and gas units and focus instead on power, aviation, and healthcare equipment. It plans to sell up to $20 billion in assets to try and recoup several quarters of earnings losses, Reuters reported.
The company also nominated three new candidates to its board of directors. The nominees include Leslie F. Seidman, a former chairman of the Financial Accounting Standards Board, Thomas Horton, who presided over the restructuring and merger of American Airlines and US Airways, and Lawrence Culp, Jr., the former CEO of Danaher who pivoted the company from a manufacturer to a science and technology firm.
The nominees will be voted on for confirmation to the board at GE's shareholder meeting in April.
GE's stock was down 21.96% for the year.
