General Electric reported a second quarter loss Wednesday that was wider-than-expected but said its cash burn rate is starting to improve, and would likely turn positive by 2021.
General Electric said its adjusted non-GAAP loss for the three months ending in June came in at 15 cents per share, around 5 cents wider than the Street consensus forecast and down from a profit of 11 cents per share over the same period last year.
Group revenues, GE said, fell 38.5% from last year to $17.7 billion, a figure that topped analysts' forecast by around $700 million. Industrial free cash flow was also better-than-forecast, at -$2.1 billion from $-2.2 billion in the first quarter, and the conglomerate said it expected to be free-cash-flow positive by next year.
"We had a very challenging second quarter that we met head-on, executing well operationally while we took actions to further de-risk our company. Our earnings performance was impacted by the ongoing impact of COVID-19 on our businesses, but Industrial free cash flow was better than our expectations and previously communicated range," said CEO Larry Culp. "We made faster progress on elements within our control, including our targeted cost and cash preservation actions.'
'We're working through a still-difficult COVID-19 environment, and while it's too early to predict the trajectory for the recovery of commercial aviation, we continue to plan for a prolonged return to prior levels of activity," he added. "We expect to return to positive Industrial free cash flow in 2021. We are accelerating our transformation to make GE stronger and drive long-term, profitable growth."
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