Recent Events at General Electric That Are Shaping Its Future

The General Electric stock dropped 2.2% on Friday shortly after the company released its quarterly revenue report. While General Electric reported higher profits than most analysts had predicted, the company’s stock dropped in reaction to the downbeat revenue and slow growth the industrial giant is facing.

According to company executives, the decline in revenue for the quarter is due to the prevailing cheap oil prices and the general slow growth of the industry. As investors decide on whether or not to invest in this multinational company, here are several events and announcements that GE has made in recent past that are shaping the type of company GE will be in the coming months and years.

GE sells off its finance arm

After making incredible profits through its finance arm, GE decide to finally sell off this banking division. Perhaps reading the script from the turmoil that followed the 2008 financial crisis, the company decided to let go of the financial division after it became riskier and less profitable. General Electric announced this shift in April 2015 saying the transformation and ultimate sell off would take two years to complete. This shift has seen GE return to what it is best known for – an industrial company. It began by selling its real estate assets said to be worth $26.5 billion. The industrial segment of this congromerate includes oil drilling and jet engines. Hundreds of billions of dollars will exchange hands as the company disposes its GE Capital lending division.

GE bets on the cloud

In August of 2015, GE announced it was planning to join companies that have taken on the cloud. The company said it wanted to get a share of the business happening on the over 50 billion computers and other machines that will be connected to the World Wide Web by the year 2020. In an effort to become a relevant industrial company in the digital world, GE wants a share in the Internet of Things space. The company’s cloud division, Predix Cloud will take up the mantle of leading the multinational into the profits in the cloud. This GE division has already made quite some profits. In 2014 alone, it made $4 in software revenue. According to GE executives, these numbers can only go up.

GE moves 500 jobs overseas

In September last year, GE announced its plans to move 500 US jobs overseas. According to company executives, this was in a bid to secure its line of business in other countries. The company says this move was necessary following the lapse of United States Export-Import Bank charter some months before. It further explained that failure to move these jobs to other countries would see it lose industrial equipment contracts, including power projects and turbines contracts.

Trian Fund Management buys a stake in GE worth $2.5 billion

In the beginning of October, 2015, Trian Fund Management announced (pdf) that it had bought a significant stake in General Electric. The $2.5 billion stake made Trian one of GE’s biggest shareholders.