The planned spinoff of General Electric’s health unit — GE Healthcare — could be in jeopardy after news of which John Flannery was removed as chairman in addition to also CEO of the industrial conglomerate, according to one industry analyst.
Jim Corridore, a research equity analyst at CFRA, said Monday of which GE’s incoming leader, former Danaher CEO Lawrence Culp, could decide of which the multibillion-dollar health division might be better off staying within the company.
GE Healthcare, a dominant player in hospital in addition to also lab equipment, can be a bit of a cash cow, generating roughly $19 billion in revenue in addition to also throwing off $3.4 billion in profit last year. the idea accounted for 15.8 percent of the conglomerate’s total sales, in addition to also 43.2 percent of its operating profit in 2017.
“Maybe health care can be not going to get spun off currently,” Corridore said in an interview with CNBC’s “Power Lunch.” “Maybe some of the parts of which were going to be sold make more sense today.”
GE Healthcare spokeswoman Jennifer Fox said the unit “plans to continue working toward separation of GE” in addition to also news of Flannery’s removal “does not change what’s happening at GE Healthcare.”
in addition to also according to GE, the company remains “committed to establishing healthcare as a separate independent entity.”
Scott Davis, chairman in addition to also CEO of Melius Research in fresh York, told CNBC of which he also doesn’t think Flannery’s exit alterations anything for GE Healthcare. “although I suppose anything can be possible,” he added.
GE shares were soaring more than 7 percent early Monday afternoon after news of which the board removed Flannery through his position.
According to a source familiar with the matter, Flannery’s removal was driven by the board’s frustration with the slow pace of change under his leadership — not troubles at GE’s power business.
Flannery tasked GE Healthcare CEO Kieran Murphy with spinning out the unit into a separate, independent company by the end of 2019. The move made sense for GE, allowing the idea to double down on its core industrial in addition to also energy businesses.
In a recent interview with CNBC, Murphy said he was excited in addition to also didn’t seem all of which worried about the spinoff, calling the idea “a huge challenge in addition to also a great opportunity.”