NEW YORK (CNNMoney) - General Electric remains mired in a cash crisis -- caused in large part by a bad bet on fossil fuels.
Profit in GE's power division crashed by 88 percent during the final three months of 2017, the embattled company said on Wednesday.
The steep decline was driven by slumping orders for giant turbines and generators used in coal and natural gas plants. GE also took a hit from a previously announced restructuring that will include 12,000 job cuts.
GE's power problems were sparked by years of bad deal making, especially under former CEO Jeff Immelt. Rather than invest heavily in renewable energy, GE doubled down on fossil fuels in 2015 by acquiring Alstom's power business, which makes coal-fueled turbines. GE has admitted that the $9.5 billion deal, its largest industrial deal ever, has suffered from the rise of solar and other renewable energy.
John Flannery, the new CEO, acknowledged in a statement that GE's power division was "down significantly" last quarter and warned "we expect market challenges to continue."
The power slump contributed to GE's overall weaker-than-expected results during the fourth-quarter.
GE has been in crisis mode for months, with shrinking cash flows forcing the giant company to halve its dividend, put long-held divisions up for sale and overhaul its board of directors. GE has even contemplated what was once unthinkable: an outright breakup of what uses to be America's most successful conglomerate.
The good news for hurting GE shareholders is the company's aviation and healthcare businesses performed better. Aviation orders climbed 11 percent, while orders for healthcare products like MRI machines gained 9 percent.
That allowed GE to stick by its forecast for 2018 earnings and cash flow -- a key metric of financial health.
"Our visibility and execution on cash is improving," Flannery said. He expects "deep cost reduction" and other moves to "position us for continued improvement in 2018."
GE shares ticked slightly higher premarket, bouncing off six-year lows. GE was the worst Dow stock in 2017, losing nearly half its value despite a boom in the overall stock market.
Wall Street is especially concerned about GE Capital, the lending arm that nearly destroyed the company during the financial crisis. While GE has sold off much of GE Capital, the parts that remain have caused problems.
GE Capital suffered a $6.4 billion loss during the fourth quarter due to worse-than-expected troubles in its insurance business.
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