By BLOOMBERG

NEW YORK • The new General Electric Co (GE) is being dogged by the same old problems.

The beaten-down manufacturer curbed its cashflow expectations just weeks after unveiling an ambitious revitalisation plan as it grapples with persistently sluggish demand for gas turbines.

The shares plunged, even as GE revealed second-quarter (2Q) results that topped Wall Street estimates.

“The biggest challenge we face continues to be working through the turnaround of our power business,” CEO John Flannery said last Friday on a conference call with analysts.

The diminished outlook underscores the depth of GE’s troubles and threatens to damp enthusiasm around Flannery’s efforts to extricate the company from one of the deepest slumps in its 126-year history.

He unveiled his long-awaited overhaul plan last month, calling for a narrowed focus, performance improvements and an exit from healthcare equipment, and oil and gas.

GE dropped 3.9% to US$13.19 (RM53.55) at 1:35pm in New York on Saturday, after sliding as much as 5.5% for the biggest intraday decline since May 23.

The shares fell 21% this year through last Thursday. Since the end of 2016, GE’s share collapse has wiped out more than US$160 billion in shareholder value.

Looking to the end of this year, the Boston-based company said it now anticipates 2018 industrial free cashflow of US$6 billion. That’s at the low end of its earlier projection of as much as US$7 billion.

The company reaffirmed its annual earnings forecast of US$1 to US$1.07 a share, though Flannery repeated the company’s suggestion earlier this year that results were trending toward the bottom of the range.

Analysts are more pessimistic: They’re predicting 95 cents, according to an average of estimates compiled by Bloomberg prior to last Friday’s announcement.

“Investors remain highly sceptical of the company’s ability to meet its full-year commitments,” Deane Dray, an analyst with RBC Capital Markets, said in a note.

That’s particularly true after the conference call, in which “management articulated an array of potential shortfalls and risk factors”.

The CEO, who took the helm from Jeffrey Immelt last year, announced plans last month to separate the healthcare unit and sell a stake in Baker Hughes Inc — his boldest steps yet to rejuvenate GE.

The company also reached agreements in the quarter to merge its century- old locomotive unit with Wabtec Corp and to sell its industrial gasengine business to Advent International Corp.

At the same time, GE had another volatile quarter on the stock market.

The company was kicked out of the Dow Jones Industrial Average after more than 100 years, a symbolic blow to one of the stock gauge’s original members.

GE also endured its biggest one-day stock decline in nine years after Flannery warned in May that there’s no “quick fix” to what ails the company — a point underscored again in its latest earnings report.

Moreover, 2Q sales fell 19% in GE Power. Flannery has said the market will likely be “soft” for several years.

Demand for gas-fired power is flagging globally, in part because of the rising use of renewable-energy sources.

“Power is still really bad,” said Karen Ubelhart, an analyst with Bloomberg Intelligence. “When are we going to find the bottom?”

The woes dragged GE’s total adjusted profit down to 19 cents a share in the 2Q, which was still good enough to surpass the 18-cent average of analyst estimates compiled by Bloomberg.

Sales rose 3.5% to US$30.1 billion, compared to a projection of US$29.4 billion.

GE’s CFO Jamie Miller acknowledged the issues in the power market, but said broader results were in line with the company’s expectations.

There is “real strength across most of our portfolio”, she said in a telephone interview.

The aviation division, which is ramping up production on a new jet engine, boosted sales 13% in the quarter.

But even in that division, a pillar of strength during GE’s travails, signs of weakness emerged.

The division’s profit margin narrowed in the 2Q, disappointing analysts from banks including RBC and JPMorgan Chase & Co.

In a note, JPMorgan’s Steve Tusa called it “the first miss we have seen here in recent memory”.