Latest News

General Electric surprises by unexpectedly reporting a quarterly profit and positive cash flow


General Electric Co. (NYSE:GE) surprised Wall Street on Wednesday by unexpectedly reporting a quarterly profit and a positive cash flow on the back of cost cuts and improvements in its power and renewable energy businesses.

The industrial conglomerate reported a free cash flow of $514 million from industrial operations in the third quarter, compared with an outflow of $2.1 billion in the previous quarter and the average analyst estimate of an outflow of $876 million.

GE said it expects industrial free cash flow to be at least $2.5 billion in the fourth quarter and positive in 2021.

Adjusted profit for the quarter came in at 6 cents per share compared with an average analyst estimate of a loss of 4 cents per share.

The company’s shares, which have fallen about 40% since the beginning of 2020, were up 8.7% at $7.72 in morning trading in New York.

“We are managing through a still-difficult environment with better operational execution across our businesses,” GE chief executive Lawrence Culp said in the earnings statement.

In response to the coronavirus (COVOD-19) pandemic-induced turmoil, GE is cutting $2 billion in costs and aiming to generate $3 billion in cash savings. The company said it has, so far, realized 75% of its target.

Revenue at both the group’s power and renewable energy businesses recovered from the last quarter even as orders saw a double-digit dip. Revenue at GE’s aviation unit fell by an annual 39% in the latest quarter.

However, a resurgence in new COVID-19 cases has raised the risk of prolonging the downturn in the aviation industry, which has led to a sharp cutback in maintenance spending by airlines, hitting both large and small suppliers.

This has compounded the troubles at GE’s aviation unit, which makes engines for planemaker’s Boeing and Airbus and had already been reeling from the grounding of Boeing’s 737 MAX planes. Boeing on Wednesday said it would take three years for passenger travel to return to pre-pandemic levels.

Mastercard sees quarterly profit miss forecasts as coronavirus pandemic hits global travel and relat

Previous article

Lloyds, Shell and BT Group among the myriad excitement on Thursday

Next article

You may also like


Leave a reply

Your email address will not be published. Required fields are marked *

More in Latest News