Cramer on the shocker from GE's CEO: 'You dropped a bomb on my head'

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CNBC’s Jim Cramer said Wednesday that he was shocked by General Electric CEO Larry Culp’s modified expectations for the struggling conglomerate’s near-term turnaround.

“Come on! You dropped a bomb on my head,” said Cramer, whose charitable trust once owned shares of GE. “I don’t really care if it was a 50 megaton or a 70 megaton but it was really sobering.”

“I went out with a group of portfolio managers last night. All we wanted to figure out was how bad it really was versus how bad it was,” Cramer said.

GE shares were sinking midmorning Wednesday, a day after Culp said at a J.P. Morgan conference that the company’s industrial free cash flow “in 2019 will be negative.” The stock closed down 4.7 percent Tuesday.

After Culp’s remarks, J.P. Morgan analyst Stephen Tusa said GE’s announcement of more trouble in 2019 was “worse than expected,” adding the firm’s price target remains $6 per share but “looks generous.”

Cramer said Tusa was spot on in his note to investors about GE. But unlike Tusa, Cramer doesn’t expect GE’s stock to go back to $6 per share. “I think it’ll do better than that,” the “Mad Money” host contended.

Cramer has been critical of GE in the past but placed renewed hope in Culp, saying the executive had what it takes to turn the business around. In November 2017, when GE’s stock first fell below $20 per share, Cramer said the company had a lot wrong with it and was “one of the biggest” investment mistakes of his career.

— CNBC’s Michael Sheetz contributed to this report.

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