GE Swings to Quarterly Profit as It Shrinks--Update
30 Abril 2019 - 6:38AM
Noticias Dow Jones
By Thomas Gryta
General Electric Co. swung to a first-quarter profit as the
conglomerate reported stronger cash production than expected while
leaving its full-year expectations unchanged.
GE reported adjusted cash flow from industrial operations of
negative $1.2 billion; the company warned earlier this year that
cash flow would drop as much as negative $2 billion this year from
its core industrial operations.
It has called 2019 a "reset year" but has warned the first
quarter would be the low point of the results. New CEO Larry Culp
is restructuring the company, prioritizing the struggling Power
division as well as reducing the conglomerate's massive debt
load.
In the first quarter, GE reported a profit of $3.55 billion,
compared with a year-ago loss of $1.18 billion. Revenue fell 2% to
$27.29 billion, as a sharp decline in the Power division, which
makes turbines for power plants, offset gains in Aviation and other
units.
"Our quarterly results were better than our expectations,
largely driven by timing of certain items, which should balance out
over the course of the year," Mr. Culp said in a statement. "This
is one quarter in what will be a multiyear transformation."
In the quarter, GE completed the sale of its century-old
locomotive business, struck a more than $20 billion deal to sell
its biotechnology business and paid $1.5 billion to settle a
long-running Justice Department probe into a legacy
mortgage-lending business.
Investors and analysts see cash production as a strong measure
of a company's performance and value. For GE, which has all but
eliminated its dividend, the goal is returning to sustainable cash
flow. But like many things at GE in recent years, the company's
complexity makes it difficult to assess performance around a single
financial metric.
Analysts had varying expectations for the company's performance
in the quarter. RBC Capital analyst Deane Dray estimated negative
cash flow of $4 billion and Gordon Haskett analyst John Inch
projected cash burn of $2.5 billion. JPMorgan analyst Stephen Tusa
estimated a negative $3 billion.
Adjusted quarterly earnings per share were 14 cents, ahead of an
analyst projection of 9 cents a share, according to Refinitiv,
while revenue was slightly above the consensus view of $27.05
billion.
GE shares rose about 6% to $10.36 in early premarket trading
Tuesday. The stock has surged about 34% this year but is down 30%
in the last 12 months. Two years ago, GE shares traded at close to
$30.
Write to Thomas Gryta at thomas.gryta@wsj.com
(END) Dow Jones Newswires
April 30, 2019 07:23 ET (11:23 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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