GE CEO John Flannery out, replaced by Lawrence Culp

John Flannery

John Flannery

General Electric, one of America's most important companies, has shocked Wall Street by replacing John Flannery, its chairman and chief executive, after just over a year in the job.

General Electric CEO John Flannery is seen at the company's office in New York City, U.S., June 26, 2018.

Analysts polled by Bloomberg have a $15 price target for GE - 15% above where shares were set to open Monday.

Mr Culp said: "GE remains a fundamentally strong company with great businesses and tremendous talent". They had dropped more than half since Flannery became CEO in August 2017.

GE also announced a $23 billion goodwill charge on its power business, which has been struggling with a downturn in the gas-turbine market, and said it will likely miss free cash flow and earnings estimates for the fiscal year of 2018.

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Culp, 55, served as CEO of Danaher from 2000 to 2014, during which he transformed the company from an industrial manufacturer to a "a leading science and technology company", according to a statement from GE.

Flannery's departure underscores the slow pace of his efforts to turn around GE. The company said it would take a non-cash charge related to that division.

The company's power business, hit by problems with its latest generation of gas turbines, posted a $10 billion loss previous year.

Changing CEOs "won't fix short-term problems at power but Larry (Culp), as an outsider, will be able to make the hard decisions on cost", said Scott Davis, an analyst at Melius Research in NY. "He's a lean manufacturing guy". We have a lot of work ahead of us to unlock the value of GE.

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