General Electric (GE) - Get General Electric Company (GE) Report will being trading Monday on a split-adjusted basis Monday after the recovering industrial group impressed with stronger-than-expected second quarter earnings last week and an improved outlook for industrial cash flows.
GE said the 1-for-8 stock split will "reduce the number of shares outstanding "to a number more typical of companies with comparable market capitalization", taking the total from around 8.8 billion to 1.1 billion.
The split "will better align GE's number of shares outstanding with companies of our size and scope. It also marks another step in GE's transformation to be a more focused, simpler, stronger high-tech industrial company," CFO Carolina Dybeck Happe told investors when the plans were unveiled in early May.
GE shares were marked 1.8% higher in early Monday trading to change hands at $105.49 each, a move that implies a market value of around $114 billion.
Shares in the group have largely stalled since then, however, even after last week's stronger-than-expected second quarter earnings that were boosted by what CEO Larry Culp called "early signs" of recovery in its cash-powering aviation business.
GE said adjusted non-GAAP earnings for the three months ending in June were pegged at 5 cents per share, up from a loss last year and 2 cents ahead of the Street consensus forecast. Group revenues also beat the Street, rising 9% to $18.3 billion.
Aviation segment revenues rose 10% from last year to $4.84 billion, GE said, while orders were up 47% to $5.5 billion. Healthcare revenues jumped 14% to $4.45 billion while renewable energy revenues gained 16% to $4.05 billion.
Looking into the second half of the year, GE reiterated that its sees adjusted earnings in the region of 15 cents to 25 cents per share, but lifted its forecast for industrial free cash flows to between $3.5 billion and $5 billion. Industrial free cash flow for the first quarter was $388 million, GE said, compared to -$845 million in the previous quarter.