"We had disappointing news," he told reporters after the announcements on Monday, Nov. 13. "There's no sugar-coating it."
At the same time, the 56-year-old who succeeded longtime CEO Jeffrey Immelt in the top job on Aug. 1 emphasized the company's historic ability to leverage technological strength to reinvent itself and said it could do so again. He backed up his assessment on Friday with a $1.1 million investment in GE stock that takes his own stake to $12.5 million.
That move will increase the impact of any further decline in the stock price on Flannery's personal wealth. A 42% slide so far this year, the company's worst performance since 2008, has already cost investors including activist Trian Partners a combined $116 billion in market value.
Flannery, however, maintains that GE's renewed focus on maximizing cash generation and profitability at its three core businesses of aviation, health care and power, will turn that around. Resetting the dividend to 48 cents a year saves the company about $4.2 billion, and cutting next year's profit target to a range of $1 to $1.07 from an original $2 gives it a realistic base from which to target future expansion.
"As we go out of 2018, investors should expect growth in earnings and cash flow and margins into 2019 and into 2020," he said at a UBS conference on Wednesday. "2018 is a reset year, a trough year, if you will, and good growth going after that."
General Electric is a holding in Jim Cramer's Action Alerts PLUS charitable trust portfolio. Want to be alerted before Cramer and the AAP team buy or sell the stock? Learn more now.
While the power division faces market challenges that may cut its profit by 25% next year, markets for GE's other businesses are healthy, Flanneryadded.
"If you look at our health-care business, if you look at our aviation business, if you look at renewables and other things, we have strong franchises performing well," he told the UBS audience. "We have a major issue in power that we have to fix, and it's fixable."
Indeed, the challenges in the power business, which dates to 1882 and is one of GE's largest, prompted the debt-ratings firm Moody's to cut GE's score one notch to A1, midway between its top Aaa and junk, on Thursday. Earnings in the unit fell 14% in the first nine months of the year to $2.53 billion.
More of What's Trending on TheStreet: