GE sees "first signs" of progress in its attempt to return powerplant

General Electric said it saw the "first signs" of success in the reversal of its troubled power generation unit, as the US industrial conglomerate raised its outlook for 2019, even though it was in a loss in the second quarter.

The world-clbad company, which manufactures everything from MRI to jet engines, said Wednesday that while there is still a "long way to go" to stabilize the energy sector, 'improving.

Orders rose 2% in the second quarter on an organic basis, excluding currency fluctuations, acquisitions and divestments in the same quarter in 2018, to $ 4.9 billion. However, the division had only organic earnings of $ 117 million, down 69% from the previous year on an organic basis.

The manufacture of large gas turbines for GE's power generation has been hit hard by the rise of renewable energies and the company is trying to reverse it. Larry Culp, who took office as general manager last October, said the energy division had "made significant improvements in reducing fixed costs and implementing projects" over the past year. quarters from April to June.

Progress in the electricity sector, expectations of cost reduction in a broad restructuring program, as well as the strength of GE's healthcare sector and the reduction in interest expense have left the company confident enough to raise its outlook for 2019.

GE, founded in the early 1890s, now expects adjusted earnings per share, which excludes certain items, to be between 55 and 65 cents, up 5 cents from an update from March. Wall Street badysts forecast 59 cents EPS for 2019, according to a FactSet survey.

Organic revenue growth in the industrial sector, which includes GE's non-financial activities, is now expected to grow to "less than 10%", from "below average" to "average".

GE's second quarter revenue was $ 28.8 billion, down 1% from a year ago. The net loss attributable to common shareholders was $ 61 million compared to $ 615 million for the same quarter in 2018. The group's diluted loss per share was 1 cent, compared to a profit of 7 cents per share. the previous period.

GE shares rose 5% to $ 11.05 in pre-market transactions in New York. They have rebounded sharply since they fell below $ 7 last year, but they were still down 18% in the last 12 months at Tuesday's close.

"We made steady progress on our strategic priorities in the second quarter. Our revenue growth is strong and the power has significantly improved the reduction of fixed costs and project execution, "said Culp, who added that he was" encouraged "by the progress made to date. now in 2019.

In a presentation accompanying the results, GE indicated that it was monitoring the global commercial skirmish and the debacle surrounding the Boeing 737 Max aircraft for which a GE joint venture is a jet engine supplier. Culp warned in April that the grounding of the 737 Max was a "new risk" for GE.

On Wednesday, GE said it "still worked closely with Boeing to actively manage the production of its engines while the 737 MAX's fleet remained stuck." Global orders for its aerospace unit declined 9% organically, GE said.