You know the news. We missed quarterly expectations by 7 cents. Disappointing yes, but let me be perfectly clear – this is not and I repeat not, a reflection on the health and going forward operation of GE and our businesses.
5 of the 7 cents was attributed to the unexpected mid-March Bear Stearns debacle market related fallout. Had that event not happened, that 5 cents or better would have been delivered. Bear Stearns was a totally unexpected and unplanned blip event for us, as it was for all financial services companies. I would note that if it was a total surprise to Bear Stearns leadership, the Federal Reserve and Treasury, one can see how it too took all of Wall Street understandably by surprise, GE included.
We consider the "Bear Stearns Effect" related earnings loss a market aberration and NOT a reflection of the short, intermediate and long term health of our financial services businesses which continue to function and grow and too which our earnings expectations remain solid and strong.
On the other 2 cents, there was unexpected setbacks in the imaging business arising from............, and too some minor recessionary impact.
Bottom line, while I told you a month ago we would hit our earnings guidance, we in fact would have, had these "non-recurring" unexpected factors not subsequently intervened. Therefore, the earnings disappointment should be viewed in the proper context - an unexpected one time hit, and not a reflection of any systemic problems in our businesses and their ongoing operations.
Our expectations going forward dismiss these recent anomalies and we look forward to staying on our strategic and operational business plan and delivering expectation earnings targets.
As for me and putting credence into what I said as respects my accountability, I take full responsibility for this unfortunate situation. I should have prudently known earlier and/or alerted the investment community to these surprises as they occurred. The fact I did not, will necessitate my resigning (author note: or substitute here language for serious compensation impact) upon finding a suitable quality replacement. That in keeping with GE's finest leadership traditions, which is all that matters. We hold our business leaders and employee base to GE performance standards and associated rewards and penalties. I should be treated no differently.
Bottom line: I'm expendable. GE credibility is not.
With that benchmark, in the broader GE sense, my career is irrelevant. GE has built its reputation on unquestionable credibility, never disappointing and I will ensure we continue that theme going forward with my departure and ensuring GE caliber quality leadership in my succession.
That is a guarantee I can truly keep.
Thank you.
Questions?"
Had he said something along these lines in a commanding, opening statement, the stock market would have likely discounted the event as an aberration, and not viciously spanked GE stock (and its poor shareholders). It too would have mitigated if not obviated the credibility assault, and provided better support for the GE share price and market overall last Friday and going forward.
What was needed during that unique pre-market window opening, was delivering a crisp, credibility preserving interview and ring-fencing the earnings disappointment as a one time aberration, concluding with a statement that the CEO, not only shareholders, will take the hit too.
In this author's opinion, he did not take the hit. Instead, he simply sought "accountability without penalty", selfishly choosing to weather the storm and retain power, which means GE will now have a long roe to hoe, in terms of the company regaining credibility with Wall Street and with that too, shareholders ultimately recouping their related losses.
A bigger man would have done the right thing for the good of the whole (company, employees and shareholders) – step aside.
Bottom line, Mr. Immelt has stated "I'm accountable", as if in a way implicitly saying "Isn't that enough and oh by the way, please don't punish me". He did not add that latter piece. Shareholders should consider finishing the spanking Wall Street began on them last Friday and reboot his statement to include a suggested "and" as follows:
5 of the 7 cents was attributed to the unexpected mid-March Bear Stearns debacle market related fallout. Had that event not happened, that 5 cents or better would have been delivered. Bear Stearns was a totally unexpected and unplanned blip event for us, as it was for all financial services companies. I would note that if it was a total surprise to Bear Stearns leadership, the Federal Reserve and Treasury, one can see how it too took all of Wall Street understandably by surprise, GE included.
We consider the "Bear Stearns Effect" related earnings loss a market aberration and NOT a reflection of the short, intermediate and long term health of our financial services businesses which continue to function and grow and too which our earnings expectations remain solid and strong.
On the other 2 cents, there was unexpected setbacks in the imaging business arising from............, and too some minor recessionary impact.
Our expectations going forward dismiss these recent anomalies and we look forward to staying on our strategic and operational business plan and delivering expectation earnings targets.
As for me and putting credence into what I said as respects my accountability, I take full responsibility for this unfortunate situation. I should have prudently known earlier and/or alerted the investment community to these surprises as they occurred. The fact I did not, will necessitate my resigning (author note: or substitute here language for serious compensation impact) upon finding a suitable quality replacement. That in keeping with GE's finest leadership traditions, which is all that matters. We hold our business leaders and employee base to GE performance standards and associated rewards and penalties. I should be treated no differently.
Bottom line: I'm expendable. GE credibility is not.
With that benchmark, in the broader GE sense, my career is irrelevant. GE has built its reputation on unquestionable credibility, never disappointing and I will ensure we continue that theme going forward with my departure and ensuring GE caliber quality leadership in my succession.
That is a guarantee I can truly keep.
Thank you.
Questions?"
Had he said something along these lines in a commanding, opening statement, the stock market would have likely discounted the event as an aberration, and not viciously spanked GE stock (and its poor shareholders). It too would have mitigated if not obviated the credibility assault, and provided better support for the GE share price and market overall last Friday and going forward.
What was needed during that unique pre-market window opening, was delivering a crisp, credibility preserving interview and ring-fencing the earnings disappointment as a one time aberration, concluding with a statement that the CEO, not only shareholders, will take the hit too.
In this author's opinion, he did not take the hit. Instead, he simply sought "accountability without penalty", selfishly choosing to weather the storm and retain power, which means GE will now have a long roe to hoe, in terms of the company regaining credibility with Wall Street and with that too, shareholders ultimately recouping their related losses.
A bigger man would have done the right thing for the good of the whole (company, employees and shareholders) – step aside.
Bottom line, Mr. Immelt has stated "I'm accountable", as if in a way implicitly saying "Isn't that enough and oh by the way, please don't punish me". He did not add that latter piece. Shareholders should consider finishing the spanking Wall Street began on them last Friday and reboot his statement to include a suggested "and" as follows:
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