General Electric Tops Q2 Profit Forecast, Boosts Outlook, Amid Culp Turnaround
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General Electric (GE) - Get Report posted stronger-than-expected second quarter earnings Wednesday, a boosted its full-year profit guidance, in one of the best indications to date that CEO Larry Culp's turnaround plans are starting to gain traction.
General Electric said its loss for the three months ending in June was pegged at 1 penny per share, or 3 cents per share when looking at continuing operations. On an adjusted basis, however, GE earned 17 per share, a figure that compares to last year's 8 cent profit and a Street consensus forecast of 12 cents per share. Group revenues, GE said, fell 4.3% from last year to $28.8 billion, a tally that modestly topped analysts' forecasts of $26.6 billion.
Looking into 2019, GE said it sees adjusted earnings per share in the region of 55 cents to 65 cents per share, and altered its forecast for industrial free-cash flow to a range of negative $1 billion to positive $1 billion.
"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," Culp said. "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."
"We will continue to take planned actions to improve our businesses and monitor some market headwinds, and we remain focused on driving continuous improvement and delivering for our customers," he added. "I am encouraged by our team's progress and dedication to date."
General Electric shares were up 0.2% to $10.54 on Wednesday.
GE's aerospace division took a $600 million hit to its cashflow linked to the grounding of Boeing Co.'s (BA) - Get Report 737 MAX, and cautioned that it would cost around $400 million each quarter the airplane remains unable to obtain FAA clearance.
GE also said Chief Financial Officer and Senior Vice President Jamie Miller will leave the company after 11 years, but will remain on board until a replacement can be found.