- General Electric will restate earnings for 2016 and 2017.
- The industrial conglomerate is also adopting a new accounting standard.
- GE’s stock has lost half its value over the past year.
General Electric, the United States’ largest industrial conglomerate, will restate its earnings for 2016 and 2017 as it adopts a new accounting standard, according to a regulatory filing on Friday.
The updated accounting standard, which will take into account revenue from long-term contracts, will result in a 13-cent cut in reported earnings per share for 2016 and a cut of 16 cents a share for 2017, according to the company’s 10-K filing.
GE is adopting the new accounting standards as the Securities and Exchange Commission investigates the company over its accounting for long-term service contracts.
The changes also come as the company struggles to reverse steep declines in some of its businesses and is looking to sell off $20 billion of assets.
It will restate earnings when it reports 2018 results, GE said in the filing. GE reports first-quarter earnings on April 20.
GE is also facing potential legal action by the US Department of Justice over allegations that its GE Capital unit and now-defunct WMC Mortgage Corp. unit violated US law in connection with subprime mortgages, according to Friday’s filing.
In January, the company reported a $10 billion loss in the quarter, hurt by a $6.2 billion charge to increase insurance reserves, and steep declines in profit in its power and transportation divisions.
Over the past year, GE’s stock has fallen more than 51% and is trading at about $14.49.
The Financial Times first reported that GE plans to restate earnings.
(Reporting By Jessica Toonkel; Editing by Susan Thomas)