GE Hit by Steep Decline in Jet-Engine Business
29 Julio 2020 - 6:22AM
Noticias Dow Jones
By Thomas Gryta
General Electric Co. posted a nearly $2 billion quarterly loss
as revenue tumbled 24%, hurt by a steep decline in a jet-engine
business that has been hobbled by the coronavirus pandemic.
The aviation business, once a profit engine for GE, swung to a
loss in the June quarter as both revenue and orders plunged. The
unit produces engines for Boeing Co. and Airbus SE planes but has
had to cut production and jobs as airlines delay orders.
However, GE said it burned through less cash in the June quarter
than it had previously warned. The company reported adjusted
negative cash flow from industrial operations of $2.1 billion,
compared with its projection of negative $3.5 billion to $4.5
billion in May. Analysts were expecting negative cash flow of $3.29
billion, according to FactSet.
"We're working through a still-difficult Covid-19 environment,"
said CEO Larry Culp, adding that he still expected a prolonged
recovery for the commercial-aviation business. "Still, based on
what we see today and the actions we've taken, sequential
improvement in earnings and cash in the second half of the year is
achievable."
GE also said it expects a return to positive cash flow in 2021.
The measure is closely watched by investors after troubles in
generating cash forced the company to slash its dividend and sell
off business units.
The conglomerate has been revamping itself under Mr. Culp with a
focus on cutting debt and generating more cash but has been hit
hard by the coronavirus crisis, leading it to pull its full-year
financial outlook in April.
On Wednesday, GE said it planned to sell its remaining stake in
oil-and-gas company Baker Hughes Co. over three years.
Write to Thomas Gryta at thomas.gryta@wsj.com
(END) Dow Jones Newswires
July 29, 2020 07:07 ET (11:07 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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