General Electric (GE) surprised analysts by reporting adjusted profit and positive cash flow

General Electric (GE) surprised analysts by reporting adjusted profit and positive cash flow

General Electric Co. (GE) shares jumped nearly 10 percent in the mid-day trading Wednesday after the company surprised analysts by posting adjusted profit for the third quarter, along with positive cash flow.

The Boston, Massachusetts-based industrial conglomerate posted a net loss of $1.19 billion, or 14 cents per share for the quarter, narrower than a loss of $9.47 billion, or $1.08 per share in the comparable period last year. On an adjusted basis, GE earned 6 cents per share, while analysts on average were looking for a loss of 4 cents per share.

Revenue for the quarter jumped 17 percent to $19.42 billion, beating $18.73 billion forecasted by analysts.

If look at the sales performance of different segments, GE’s Power unit revenue increased 3 percent to $4.03 billion, up from consensus forecast of $3.89 billion, while revenue from its Renewable Energy unit rose 2 percent to $4.53 billion, beating estimates of $4.48 billion. Comparatively, its Aviation sales plummeted 39 percent to $4.92 billion, slightly short of $4.95 billion forecasted by analysts, and Healthcare sales slipped 7 percent to $4.57 billion, better than analysts’ average estimate of $4.14 billion.

The company said its industrial free cash flow in the quarter was $514 million, as compared to a negative cash flow of $1.03 billion estimated by analysts.

Chief Executive Larry Culp said the company is improving its earnings and cash performance through organic margin expansion across all its units except Aviation. Last month, Culp predicted the cash flow would turn positive in the second half of the year.

GE stock is currently trading around $7.72 on a heavy volume of 170 million versus average volume of about 99 million. The company’s share price has been trading low since the start of Covid-19 pandemic. The stock has plummeted about 30 percent so far this year.


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