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A logo is displayed next to a gas turbine at the General Electric Co. (GE) energy plant in Greenville, South Carolina, the United States, on Tuesday, January 10, 2017. General Electric Co. is scheduled to release its results on January 20. .
Sharrett / Bloomberg / Getty Images
General Electric shares jumped more than 6% in pre-market trading on Tuesday after the company reported better-than-expected industrial free cash flow for the fourth quarter and bullish outlook for this year.
The company closed the fourth quarter with $ 4.37 billion in industrial free cash flow, a surprise after CEO Larry Culp projected at least $ 2.5 billion for the last three months of the year. The good quarter pushed the company’s industrial free cash flow into positive territory for the year.
GE also forecast it would generate between $ 2.5 billion and $ 4.5 billion in industrial free cash flow by 2021.
The company also reported fourth-quarter revenue slightly above analysts’ expectations, while its profits fell below estimates as the industrial giant continues to weather the coronavirus pandemic.
Here’s how GE fared compared to what Wall Street expected, based on average analyst estimates compiled by Refinitiv:
- Adjusted EPS: 8 cents versus 9 cents expected.
- Revenue: $ 21.93 billion versus $ 21.83 billion
The stock has been on a tear in recent months, sparked by a surprise third-quarter profit reported in October that caused the stock to jump more than 70% in the fourth quarter. Positive news from the Covid-19 vaccine, which bodes well for the conglomerate’s beleaguered aviation sector, supported the rise.
And some investors are optimistic about the company’s turnaround under Culp, especially since it expects positive cash flow for 2021. The company has continued to pay off debt during the pandemic and cut costs through, for example. , layoffs in its airline activities.
“As 2020 progressed, we significantly improved GE’s profitability and treasury performance despite a still challenging macro environment,” Culp said in a statement. “The fourth quarter marked the end of a difficult year thanks to strong free cash flow, reflecting the results of better operations as well as strong and improving orders in the electricity and renewables sectors.
This story is developing. Check back here for updates.
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