In this news, we discuss the GE posts quarterly profit as business recovers from pandemic lows.
(Reuters) – General Electric Co GE.N unexpectedly reported quarterly profit and positive cash flow on Wednesday thanks to cost cuts and improvements in its energy and renewable energy business, which raised its shares in pre-trade.
The Boston-based industrial conglomerate reported $ 514 million free cash flow from industrial operations in the third quarter, down from an outflow of $ 2.1 billion in the previous quarter and Refinitiv’s average analyst estimate of an outflow of $ 876 million.
GE said it expects industrial free cash flow to be at least $ 2.5 billion in the fourth quarter and positive in 2021.
Adjusted earnings for the quarter were 6 cents per share compared to Refinitiv analysts’ average estimate of a loss of 4 cents per share.
The company’s shares, which have fallen about 40% since the start of 2020, are up about 6% in pre-market trading.
“We are managing in a still challenging environment with improved operational execution across all of our businesses,” said Managing Director Lawrence Culp.
Culp is trying to turn the business around by improving free cash flow and reducing debt. However, the coronavirus pandemic hit those efforts hammering GE’s aerospace unit, typically the most profitable and cash-generating business segment of the company.
In response to the turmoil caused by the pandemic, GE is cutting costs by $ 2 billion and aims to generate $ 3 billion in cash savings. The company said it had so far achieved 75% of its goal.
Revenues from the electricity and renewable energy activities rebounded from last quarter, although orders were down double digits. GE’s aerospace unit revenue fell 39% annually in the last quarter.
Edited by Saumyadeb Chakrabarty and Marguerita Choy
Original © Thomson Reuters