[ad_1]
By Alwyn Scott and Sanjana Shivdas
(Reuters) – General Electric Co (N 🙂 reported on Wednesday its forecast for 2019 due to a slight improvement in some of its industrial units, but recorded a net loss and fomented investor concerns, lowering its shares.
The Boston-based manufacturer of jet engines, power plants and medical devices also announced that Chief Financial Officer, Jamie Miller, appointed in October 2017, was planning to step down after hiring. a successor in the coming weeks.
GE has appeared to be encouraging investors by stating that it could generate as much as $ 1 billion in free cash flow this year, compared to a potential $ 2 billion exit it expected in May. GE has also raised its earnings outlook by 5 cents per share.
"There should be some relief from the rise in EPS and free cash flow," Barclays (LON :), said badyst Julian Mitchell.
However, GE's portfolio of low-margin industrial companies remains a concern. GE has once again posted its red ink after two profitable quarters due to a $ 744 million goodwill charge related to its power grid business. GE also spent less time on restructuring than badysts expected.
"The increase in EPS of 5 cents … is lower than the tax benefit of 6 cents this quarter," said John Inch, an badyst at Gordon Haskett, in a note, referring to a contract GE non-recurring recorded during the quarter. The increase in cash flow "seems to be strongly influenced by the reduction in the drag related to the restructuring of liquidity," he added.
After climbing 4% in pre-market transactions, GE shares lost 2.5% to $ 10.25.
(GRAPHIC – GE shares under CEO Culp: https://tmsnrt.rs/2yqnVjR)
GE's adjusted industrial free cash flow was negative $ 1 billion for the quarter. While this is in line with CEO CEO Larry Culp's negative range of $ 1 to $ 2 billion in May, this reflects the low profit margins and low cash flow that have affected industrial performance. from GE, said Culp.
GE 's energy sector, which has long weighed on profits, recorded a profit of 117 million dollars. But its relatively strong aerospace business has suffered from extensive problems with the Boeing 737 MAX jet, which regulators grounded in March.
"Free cash flow is the measure everyone is concerned about," said Deane Dray, an badyst at RBC Capital Markets.
Investors were concerned that GE's cash generation has not kept pace with earnings in recent years, raising concerns that GE's actual financial performance was lower than expected. announced results. It was known that GE was managing its profits, but in May, Culp had said it would focus on generating cash and leave the profits "almost like a byproduct," Dray said.
Despite a loss, GE has raised its forecast for the year. It is now expected that the growth of the organic business turnover of the industry generates a percentage increase "to a figure less than 10%", up from the GE's previous prediction of "lower than moderate average".
He also raised the range of adjusted earnings per share by 5 cents from 55 to 65 cents, and increased his forecast of free cash flow to between $ 1 billion and $ 1 billion, from $ 0 billion to $ 2 billion.
GE's loss from continuing operations attributable to shareholders was $ 291 million for the quarter ended June 30, compared with earnings of $ 679 million a year earlier.
Loss per share from continuing operations decreased by 3 cents compared to earnings of 8 cents, the company said. On an adjusted basis, GE realized earnings per share of 17 cents, including a one-time gain of 6 cents per tax audit. This compared badysts' estimates to 12 cents on average, according to Refinitiv's IBES data.
Total revenues decreased 1.1% to $ 28.8 billion.
[ad_2]
Source link
