The company reported stronger earnings and revenue than expected…
On Tuesday morning, General Electric released its second-quarter earnings, and the results were better than expected. Earnings came in at 17 cents per share. That’s still down 6% from a year earlier but beat estimates of 12 cents per share.
And the company burned through less cash than the previous quarter, which is something investors are looking to see. Shares of GE initially rose in pre-market trading but then fell more than 4% by mid-morning.
An Overview of GE’s Earnings Report
Overall, the earnings report wasn’t great, but it showed signs that the company is continuing to turn things around. Here’s an overview of the earnings report and what Wall Street can expect from GE going forward.
The Company’s Power Division Is Still Down
CEO Larry Culp tried to temper investor expectations of the company’s power division. In March, he told investors that the division is in “serious turnaround mode” and that improvements won’t happen quickly. During the second quarter, orders were down 22% and sales were down 25% from a year earlier.
GE’s Cash Burn Seems to Be Slowing
One of the biggest things investors are looking for is a sign that GE is burning through less cash and beginning to return to profitability. During the second quarter, Culp focused on reducing the company’s assets to cut down on debt.
The earnings report showed that the company’s free cash flow was a negative $1 billion, which is better than expected.
The Company Raised Its Full-Year Guidance
GE released a statement saying that the company is raising its full-year guidance thanks to “steady progress on our strategic priorities.” The company expects earnings to range from 55 to 65 cents per share, which is 5 cents higher than its previous range.
2019 Is Still a Rebuilding Year for GE
Earnings reports can be tricky to unpack … there are so many different parts to consider. But overall, investors are likely encouraged by this latest report from GE. The company continues to make small steps forward and show that it’s returning to financial stability.
It hasn’t even been a year yet since Larry Culp took over as GE’s CEO. But this is an indication that the company has the right leadership in place to move it forward.
