The future of GE Digital

The fate of General Electric’s digital business is unclear as the company’s new CEO dives into an internal review to pump up GE’s profits and restore its sagging stock price.

Jeff Immelt, who was CEO for 16 years, was enthusiastic about high-tech initiatives such as 3-D printing and the company’s Predix software system for analyzing data from internet-connected industrial machines. Immelt’s parting note declared that such initiatives “will define GE in the future.”

But for now, they’re a small part of GE’s revenue. GE is aiming for more than $4 billion in revenue this year from GE Digital, its industrial internet division. That’s up from $3.6 billion in 2016 — but out of $124 billion in revenue from all businesses last year. The biggest drivers of the conglomerate’s revenue and profits are its power, aviation and health care operations.

William Blair analyst Nicholas Heymann believes new CEO John Flannery might have to sell a portion of the GE Digital business to cover investment costs required to expand Predix around the world.

GE isn’t commenting. Flannery, who led GE’s health care business, plans to share his findings in November.