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It was a hard day for General Electric.
Shares of the besieged company climbed nearly 5% after Tuesday's announcement of a profit higher than Wall Street expectations in terms of income and income.
GE CEO Larry Culp also reiterated that the conglomerate had guided its goals for 2019, a decision that many have taken to indicate that the situation would not worsen.
Market observers were greatly impressed by the results, including the significant slowdown in GE cash flow.
Here are some of their reactions:
Jim Cramer, the host of CNBC's "Mad Money" and former GE shareholder for his charitable trust, said it was still too early to say if the worst had happened:
"I want to jump on it and say:" You know what? The coast is clear. " [But] I think that [CEO] Larry Culp will be the last person to say that the coast is clear. They still do not understand. They have their arms around [the] Long term care problems, fend off with how much money they can really earn with turbines. … But the fact is that it's a shabby affair. And it was a good deal. The best thing that could happen there would be that other companies simply make turbines. Because otherwise, someone has to blink, because it's a bad deal. "
Daniel Babkes, senior research badyst at Pzena Investment Management, said the numbers showed signs of improvement:
"There are two key issues with this company, two major challenges that everyone focuses on.One of them is the performance of the energy sector, which has resulted in a great deal of loss of revenue and cash flow over the last two years, modeled a loss of more than $ 200 million for this segment, and it actually appears that the segment is making a very small profit, which is a little better than what we expected, and I think that everyone is paying special attention to cash flow generation, now there is a seasonality in this activity, and we know that this year will be a weak year. for cash generation, about $ 3 billion, and it appears that adjusted free cash flow was negative [$]1.2 [billion]. So it happens much higher than people feared. […] The numbers we see often in a company like this reflect the operational decisions made over the past two years. So what Larry Culp and what the management team said to the market is 2019 will not be a good year from the numbers point of view, but they are currently making operational changes to improve performance. "
Melius Research President and CEO Scott Davis was pleasantly surprised by the difficult results of the industry:
"I did not hate what I saw in the numbers. This is the first time I could say that for probably five years. The numbers were good. They were not great. They were solid. Over the last few years, we have felt like a leveraged bank with a bad industrial activity and now we have the impression of becoming a much smaller bank, with a changing industrial activity. […] On the call, they said that there had been a restructuring postponed, so time is running out. I think some of them are probably better underlying deals. I mean, Larry Culp is an operational guy. That's what he did at Danaher's. This is a factory guy. So during the teleconference, the question I asked him was about lean manufacturing, and are these factories ready to go better? And he said yes, they are. And I think that's where you'll see a major improvement. "
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