General Electric's earnings tumbled in the third quarter, missing Wall Street's expectations as the company said that it will pare $20 billion in businesses within the next two years to make its operations more efficient.

The company's profit in the period ended Sept. 30 was $1.8 billion, a 10% drop from the $1.99 billion it earned during the same period last year and below the $3.6 billion expected by analysts surveyed by S&P Global Market Intelligence.

On an adjusted basis, the company reported earnings of 29 cents per share, missing Wall Street's prediction of 49 cents.

More:General Electric shrinking: sells GE Industrial to Zurich-based ABB for $2.6 billion

More:Jeff Immelt exits as GE chairman months earlier than planned

More:Swiss ABB to buy unit from General Electric for $2.6 billion

“This was a very challenging quarter,'' John Flannery, the company's chairman and CEO said in a statement, noting that "while a majority of our businesses had solid earnings performance,'' challenges in the power sector led to "lower earnings and higher inventory. 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.''

The company's turnaround will include the shedding of unprofitable businesses. "The company has many strong franchises, with a number of other businesses which drain investment and management resources without the prospect for a substantial reward,'' Flannery said in an earnings call with investors. The company has identified $20 billion-plus of assets it will exit in the next one to two years.

GE's cash flow this year is expected to take a hit tied to steep restructuring costs, taxes and reduced revenue from power services. “This performance is simply not acceptable’’ Flannery said in the investors call. But “we expect improvement in that cash flow in 2018 ... 2018 is a reset year.’’

Flannery has worked for GE for 30 years but became CEO less than three months ago, succeeding Jeff Immelt, who had run the company for nearly 16 years and guided the long-standing conglomerate into the digital age but also steered it through a period in which shares plunged more than 25%.

Since taking the helm, Flannery has overhauled the leadership of the company's various divisions and also mandated that perks such as corporate jets be cut back.

GE pared its profit outlook for 2017 to between $1.05 and $1.10 per share, down from previous guidance of $1.60 to $1.70 per share. Analysts surveyed by S&P had predicted profit of $1.47 per share.