BackGeneral Electric on Surprise Profit as CEO Sees Turnaround Accelerating
The shares climbed 7.4% to $7.63 at 9:39 a.m. in New York, confounding a slump in the broader marketIndustrial free cash flow was $514 million in the third quarter. Analysts had expected GE to burn through $968.3 million in cash
PremiumGeneral Electric Co. surged after the company reported a surprise profit and predicted gains in free cash flow late this year and in 2021. Adjusted earnings of 6 cents a share in the third quarter bucked Wall Street’s expectations for a 4 cent loss, and sales of $19.4 billion also exceeded analyst estimates. Industrial free cash flow, a key gauge of earnings power, will be at least $2.5 billion in the fourth quarter and positive next year, GE said in a statement Wednesday as it reported quarterly results.
The financial improvement buoys Chief Executive Officer Larry Culp’s efforts to get his turnaround back on track after the coronavirus pandemic upended GE’s jet-engine division and slammed its other businesses. While orders still sank in the third quarter in GE’s aviation, power equipment and health-care units, the upbeat outlook underscores the company’s progress in stabilizing its operations amid the crisis. “GE’s transformation is accelerating," Culp said in the statement. “We are managing through a still-difficult environment with better operational execution across our businesses, and we are on track with our cost and cash actions."
The shares climbed 7.4% to $7.63 at 9:39 a.m. in New York, confounding a slump in the broader market. GE tumbled 36% this year through Tuesday, compared with a 4.9% decline in a Standard & Poor’s index of U.S. industrial companies.
Industrial free cash flow was $514 million in the third quarter. Analysts had expected GE to burn through $968.3 million in cash.
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