General Electric shares plummeted on Friday after it reported lower earnings and slashed its profit forecast, raising the stakes for next month's turnaround presentation by its new chief executive officer.

GE, reporting a drop in third-quarter earnings due to continued weakness in the power and oil and gas businesses, said it would divest $20 billion in assets in the next two years. The company promised more “sweeping changes” as it promised to go “back to basics,” according to investor materials with the earnings.

Shares tumbled 7.0 per cent in pre-market trading to $21.89.

“It's clear we need to make some major changes,” said chief executive John Flannery at the outset of an analyst conference call. “Our results are unacceptable to say the least,” he added.

Flannery has vowed a comprehensive plan at a November 13 investor day for rousing growth at the 125-year-old company. Net profit for the quarter ending September 30 was $1.8bn, down 9.7pc from the year-ago period.

Revenues were $33.5bn, up 14.4pc, reflecting the effects of the Baker Hughes oil services acquisition. The company cut its full-year operating profit forecast to $1.05 to $1.10 per share from $1.60 to $1.70 in a July forecast.

Revenues and profits tumbled in the power division, where the market for gas turbines remained weak. Oil and gas was another burden, as GE booked $267 million in one-time restructuring expenses amid sluggish investment from exploration and production companies.

Better-performing divisions included aviation, healthcare and renewable energy.

“While a majority of our businesses had solid earnings performance, this was offset by a decline in GE Power performance in a difficult market,” Flannery said.

“We believe that the new leadership team at Power and the cost actions that we are taking will better position the company in 2018 and beyond,” he said.

Under Flannery's predecessor, Jeff Immelt, GE sought to reposition the company as more of a pure-play industrial conglomerate, selling off the NBC media division and radically cutting back GE Finance.

But critics say GE is now currently too exposed to cyclical industries and that there is little prospect for near-term growth in many of its most important businesses.

The company has also come under fire for profligate spending under Immelt.

The Wall Street Journal reported Thursday that Immelt regularly took two corporate jets for travel in case one broke down. GE said last month that it plans to sell its corporate jet fleet.

Other cost-cutting is expected to figure heavily in the plan, but analysts are also expected to press Flannery on divesting assets, a move taken by other conglomerates.

Flannery has already announced a number of executive appointments and said he will pursue “sweeping” change in the period ahead. Flannery has signaled a strong commitment to maintaining GE's dividend, a priority to investors.