General Electric Posts Surprise Q3 Profit, Sees Improving Industrial Cash Flows

General Electric Posts Surprise Q3 Profit, Sees Improving Industrial Cash Flows

General Electric CEO Larry Culp said industrial free cash flows will rise to “at least $2.5 billion in the fourth quarter”, and continue to be “positive in 2021”, after the industrial group posted a surprise adjusted profit for the three months ending in September.

General Electric Co.  (GE) – Get Report posted a surprise third quarter profit Wednesday, while forecasting solid industrial free cash flows for the final months of the year, sending shares higher in pre-market trading.

General Electric said its adjusted profit for the quarter was pegged at 6 cents per share, down from 15 cents per share over the same period last year and well ahead the Street consensus forecast of a 4 cents per share loss. Group revenues, GE said, fell 17.1% to $19.4 billion, a figure that topped analysts’ estimates of an $18.7 billion tally.

GE also said it expects its industrial free cash flow to rise to $2.5 billion over the final three months of the year, and remain positive in 2021, a key delivery target for CEO Larry Culp as he continues the uneven turnaround for the industrial group.

“I am proud of the GE team’s work in the third quarter to build momentum while continuing to protect the safety of our employees, serve our customers and communities, and preserve GE’s strengths,” Culp said. “We are improving our profit and cash performance with organic margin expansion in every segment except Aviation, though orders more broadly remain under pressure.”  

“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. While our work continues, GE’s transformation is accelerating, and we expect Industrial free cash flow to be at least $2.5 billion in the fourth quarter and positive in 2021,” he added  “We remain focused on unlocking upside potential for the long term.”  

General Electric shares were marked 6.8% higher in pre-market trading immediately following the earnings release to indicate an opening bell price of $7.58 each.

GE Power revenues rose 2.54% to $4.03 billion, the company said, while Aviation revenues plunged 39% to $4.9 billion as the continued grounding of Boeing Co. BA 737 MAX, as well as significant slump in demand for passenger aircraft, hammered the division’s top line.

Aviation division orders were down 54%, GE said, while overall profits fell by $400 million to $1.4  billion. 

Provided by: The Street Retirement

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