GE soars as cash outlook shows turnaround regaining traction
Ryan Beene and Brendan Case, Bloomberg News
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General Electric Co. signaled renewed progress for Chief Executive Officer Larry Culpâs turnaround effort with a cash-flow outlook that surpassed Wall Streetâs expectations.
Industrial free cash flow will be US$2.5 billion to US$4.5 billion this year, GE said in an earnings statement Tuesday. The midpoint of the range handily exceeded the US$2.57 billion average of analyst estimates for the closely watched metric. GE also resumed providing an earnings forecast a sign that the uncertainty caused by the coronavirus pandemic is beginning to abate.
General Electric Co on Tuesday offered an upbeat outlook for its business this year after reporting a surge in quarterly free cash flow, sending its shares higher in pre-market trade. The Boston-based industrial conglomerate predicted a free cash flow of $2.5 billion to $4.5 billion this year after generating cash flow of $4.4 billion in the fourth quarter. That compares with Refinitiv s average analyst estimate of $3.03 billion for 2021 and about $2.6 billion for the latest quarter. The company had previously predicted a cash flow of at least $2.5 billion in the fourth quarter and a return to positive cash flow for 2021. Free-cash flow is closely watched by investors as a sign of the health of GE s operations and ability to pay down debt.
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GE’s Improving Cash Outlook Signals New Traction for Turnaround
Bloomberg 1/26/2021 Ryan Beene
(Bloomberg) General Electric Co. signaled renewed progress for Chief Executive Officer Larry Culp’s turnaround effort with a cash-flow outlook that surpassed Wall Street’s expectations.
Industrial free cash flow will be $2.5 billion to $4.5 billion this year, GE said in an earnings statement Tuesday. The midpoint of the range handily exceeded the $2.57 billion average of analyst estimates for the closely watched metric. GE also resumed providing an earnings forecast a sign that the uncertainty caused by the coronavirus pandemic is beginning to abate.
The outlook provides a new boost for Culp’s drive to rescue the maker of aircraft engines, power turbines and medical scanners from an epic corporate collapse. While the pandemic upended that effort early last year, GE came roaring back in the fourth quarter to generate $4.4 billion in industrial free cash f
4 Min Read
CHICAGO (Reuters) - General Electric Co on Tuesday offered an upbeat outlook for its business this year after reporting a surge in quarterly free cash flow, showing Chief Executive Larry Culp’s turnaround plan is gaining traction.
The performance came largely on the back of improved operational management and recovery in the company’s power and renewable businesses.
Since taking over the company’s reins in 2018, Culp has been focusing on lean-manufacturing practices aimed at eliminating waste and continuous improvement. It has helped drive cash savings and rendered GE’s businesses more profitable.
For example, its gas power division, which competes with Mitsubishi and Siemens, stopped burning cash a year earlier than GE previously indicated. Its non-gas power business reported the first profit growth this quarter in two years.