Barely 24 hours after Culp became CEO, S&P International Scores downgraded the credit score rankings of GE (GE) and GE Capital. Moody’s and Fitch warned they might do the identical.
All three rankings companies cited GE’s elevated leverage and shrinking money flows — an alarming development exacerbated by severe issues at GE’s energy division. GE mentioned on Monday that plunging profit at GE Power will trigger the mother or father firm to overlook targets in 2018.
Through the years, GE has piled on tons of debt attributable to poorly-timed deals, a large pension deficit and misguided share buybacks.
Underscoring the size of the issue, Moody’s mentioned that GE’s “very elevated leverage” could lead on it to downgrade the corporate’s score by a number of notches. Scores downgrades could make it costlier for corporations to borrow cash.
The excellent news is that S&P up to date its outlook on GE to “steady” as a result of the agency expects leverage and money circulate will enhance within the coming years.
Nonetheless, GE’s debt issues might power the corporate to reexamine its…