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General Electric Tops Earnings Forecast, Repeats Guidance; Shares Slide

GE reiterated its full-year earnings guidance of 15 cents to 25 cents per share with industrial free cash flows in the region of $2.5 billion and $4.5 billion.

General Electric Co  (GE) - Get General Electric Company Report posted stronger-than-expected first quarter earnings Tuesday, but repeated its full-year profit forecast amid a continued slump in aviation, sending shares lower in pre-market trading.

General Electric said adjusted non-GAAP earnings for the three months ending in March were pegged at 3 cents per share, down 2 cents from the same period last year and 2 cents ahead of the Street consensus forecast. Group revenues, General Electric said, fell 16.6% to $17.1 billion, coming in shy of analysts' estimates of a $17.52 billion tally.

Looking into the 2021 financial year, GE reiterated that its sees adjusted earnings in the region of 15 cents to 25 cents per share, as well as industrial free cash flows of between $2.5 billion and $4.5 billion. Industrial free cash flow for the first quarter was negative $845 million, GE said, but came in ahead of the -$1.5 billion Street forecast.

“I am proud of the GE team's solid first quarter results, despite a still difficult environment for Aviation. We are improving our cash performance and profitability with Industrial free cash flow growth of $1.7 billion year-over-year, excluding BioPharma, and organic margin expansion across all segments, except Aviation. This continued progress sets us up well to deliver on our 2021 commitments,” said CEO Larry Culp. 

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“Our recent GECAS transaction serves as an important catalyst in our transformation to a more focused, simpler, and stronger industrial company. At the same time, our businesses are building momentum by accelerating our lean and decentralization efforts," he added. "We are shifting more toward offense and capturing opportunities in the energy transition, precision health, and future of flight. I am confident we are well positioned to drive profitable growth, achieving high single digit free cash flow margins over time and creating long-term value for shareholders.”  

General Electric shares were marked 3.5% lower in late-morning trading following the earnings release to change hands at $13.08 each. 

GE Power revenues fell 12% $3.63 billion, the company said, while Aviation revenues plunged 28% to $4.992 billion as the continued grounding of Boeing Co.  (BA) - Get The Boeing Company Report 737 MAX, as well as significant slump in demand for passenger aircraft, hammered the division's top line.

Aviation division orders were down 26%, GE said, while overall profits fell 36% to $641 million.