(Adds S&P rating cut, Fitch and background; Updates shares)
Oct 2 (Reuters) - Ratings agency Standard & Poor’s cut General Electric Co’s credit rating on Tuesday, a day after the conglomerate announced a $23 billion charge related to its power business and ousted its chief executive officer.
Meanwhile, Moody’s Investor Service and Fitch have placed the company and its finance unit under review for possible downgrades, citing weakness in the power business.
“The latest news on power performance has led us revise down our view of GE’s aggregate competitive positioning, with solid performance in aviation and health care further overshadowed by weakness in the power segment,” S&P said, cutting its credit rating on GE to ‘BBB+’ from ‘A’.
GE also said on Monday it would fall short of its forecast for free cash flow and earnings per share for 2018 due to its struggling power business. The company replaced CEO John Flannery with board member and turnaround specialist Larry Culp.
While the latest change was an additional concern for the review, which will be addressed within a few weeks, a potential downgrade of the long-term ratings of GE and GE Capital may not be limited to one notch, Moody’s said.
The 126-year-old conglomerate that was once the most valuable U.S. corporation and a global symbol of American business power has been shedding businesses to focus on jet engines, power plants and renewable energy.
The Boston-based company foundered in several industrial markets and its move into financial services steered it into the global financial storm in 2008.
GE shares, which fell as much as about 3 percent in early trading, were up about 2 percent.
The company’s shares gained as much as 16 percent on Monday, but are still down about 31 percent for the year. (Reporting by Arunima Banerjee in Bengaluru; Editing by Sriraj Kalluvila)