In the wake of a surprise earnings shortfall last week, Wall Street’s patience has run out as the stock has plunged to its lowest level in four years. While Mr. Immelt’s job seems secure for now, stock analysts who have long supported both him and the company’s sprawling structure now say a rethinking is in order.
“There is no doubt that this is a historic event,” said Steve Tusa, an analyst with JPMorgan Chase. “The company has to convince investors that something is going to change.”
Once-isolated calls for at least a partial breakup of the conglomerate have become a chorus, with NBC Universal, appliances and GE Money, the consumer finance unit, emerging as prime candidates for a sale or spinoff. Unloading these divisions would return billions to shareholders, advocates say, while allowing G.E. to focus on its booming infrastructure business, which sells big-iron items like locomotives, jet engines and power turbines.
