General Electric Reports Second Quarter Earnings and Outlook

General Electric (NYSE: GE) reported its second quarter-results Wednesday that topped Wall Street’s expectations, while accentuating an expected impact to cash flow as the Boeing (NYSE: BA) 737 Max aircraft remains grounded. 

Here are some notable numbers from the Company’s report, compared alongside estimates compiled by analysts: 

  • Revenue: USD 28.8 Billion, vs. USD 28.7 Billion expected 
  • Adjusted Earnings: USD 17 cents per share, vs USD 12 cents per share expected
  • Adjusted industrial free cash flow: (USD -1 Billion) 

Analysts and investors sharply monitors General Electric’s free cash flow to gauge the health of the company, which is in the midst of a multi-year turnaround plan under CEO Larry Culp. GE’s free cash flow metric is a measure of efficiency, referring to money left over after the Company pays for operational and capital expenses. The Company described 2019 as a “reset year,” where it plans to restructure its Power Unit, cutting costs and selling its biopharmaceutical business to Danaher Corporation (NYSE: DHR)

General Electric burned through USD 2.2 Billion in the first six months of 2019 after reporting an adjusted cash burn of USD 1.2 Billion in just the first quarter. In May, the Company’s Chief Financial Officer Jamie Miller expected a quarterly cash burn of USD 1-2 Billion. General Electric now sees full-year adjusted earnings per share of USD 55-65 cents, up from USD 50-60 cents. Thus, raising its industrial free cash flow forecast from (USD -1 Billion) to USD 1 Billion vs its preceding target of flat to (USD -2 Billion). 

During this transitional period, the company faces adversity, CEO Larry Culp remains optimistic, “We made steady progress on our strategic priorities in the second quarter. Our top-line growth was solid, and Power made meaningful improvements on fixed cost reduction and project execution,” he said in the earnings release. “Due to improvements at Power, lower restructuring and interest, higher earnings, and better visibility at the half, we are raising our full-year outlook for Industrial segment organic revenues, adjusted EPS, and Industrial free cash flows, and we are holding our margin guidance.” GE’s CEO Larry Culp stated that priorities for 2019 include fixing GE Power and reducing bad debt. 

Following the release, the industrial conglomerate said its Chief Financial Officer Jamie Miller will be stepping down from her position but will remain in her role during this transitional period until a yet to be identified replacement is found. Miller has been with the Company since 2008 and was declared CFO in 2017.

3 Comments
  1. Fred Katayama 3 weeks ago
    Reply

    Unusual PUT activity (Sept’ $9s)

    • Edward Sin 3 weeks ago
      Reply

      only time will tell, I think $GE is ready to push higher imo

  2. Jasmine K. 3 weeks ago
    Reply

    Just baffles the mind that $GE is down. Glad my calls are good for another 3 weeks. Maybe we will see a reversal next week?

Leave a Comment