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GE Announces Elimination of 225 Jobs at Schenectady Plant

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General Electric Company (GE - Free Report) recently announced that it is laying off 225 production jobs at its plant located in Schenectady. As part of the move, the company has decided to cut 200 hourly, production employees. Also, the company has decided not to fill 25 vacant positions.

GE Power is the largest business segment of the company in terms of corporate revenues. However, the business has been a drag on earnings in the last few quarters. The company predicts weakness in new gas orders, increasing popularity of renewable energy sources, overcapacity, macroeconomic challenges and geopolitical tensions to take a toll on the segment's performance, while cost reduction actions are anticipated to bring in some relief. Notably, this decision is expected to help GE Power in achieving its $1 billion target of structural costs reduction in 2018.

Existing Business Scenario

General Electric is poised for long-term growth with improved performance from the emerging markets like India and China. In fact, the company has been selling big-ticket items such as locomotives and power turbines to India and China. Moving ahead, it expects to benefit from these regions, given their fast economic growth.

Moreover, the continued strength in Aviation, on the back of rising passenger air travel globally and growth in unit orders as well as Healthcare, driven by strengthening foothold in emerging markets, development in advanced markets and growth in bioprocess businesses will support top-line growth in 2018. Also, strengthening orders for onshore wind is expected to boost performance of Renewable Energy.

Meanwhile, in the past three months, this Zacks Rank #3 (Hold) company has lost 12%, underperforming the industry’s decline of 1.2%.

Notably, in the first half of 2018, the company reduced its structural costs by roughly $1.1 billion. As a matter of fact, it remains on track to reduce industrial structural costs in excess of $2 billion in 2018.

Key Picks

Some better-ranked stocks from the same space are Crane Company (CR - Free Report) , Carlisle Companies Incorporated (CSL - Free Report) and ITT Inc. (ITT - Free Report) . All these companies carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Crane exceeded estimates in each of the trailing four quarters with an average positive earnings surprise of 3.03%.

Carlisle Companies outpaced estimates in each of the preceding four quarters with an average positive earnings surprise of 12.85%.

ITT surpassed estimates in each of the trailing four quarters with an average positive earnings surprise of 6.33%.

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