GE Jumps on Surprise Profit as CEO Larry Culp Sees Turnaround Accelerating

GE Jumps on Surprise Profit as CEO Larry Culp Sees Turnaround Accelerating(Bloomberg) — General Electric Co. surged after the company reported a surprise profit and predicted gains in free cash flow late this year and in 2021.Adjusted earnings of 6 cents a share in the third quarter bucked Wall Street’s expectations for a 4 cent loss, and sales of $19.4 billion also exceeded analyst estimates. Industrial free cash flow, a key gauge of earnings power, will be at least $2.5 billion in the fourth quarter and positive next year, GE said in a statement Wednesday as it reported quarterly results.The financial improvement buoys Chief Executive Officer Larry Culp’s efforts to get his turnaround back on track after the coronavirus pandemic upended GE’s jet-engine division and slammed its other businesses. While orders still sank in the third quarter in GE’s aviation, power equipment and health-care units, the upbeat outlook underscores the company’s progress in stabilizing its operations amid the crisis.“GE’s transformation is accelerating,” Culp said in the statement. “We are managing through a still-difficult environment with better operational execution across our businesses, and we are on track with our cost and cash actions.”The shares climbed 7.4% to $7.63 at 9:39 a.m. in New York, confounding a slump in the broader market. GE tumbled 36% this year through Tuesday, compared with a 4.9% decline in a Standard & Poor’s index of U.S. industrial companies.Industrial free cash flow was $514 million in the third quarter. Analysts had expected GE to burn through $968.3 million in cash.(Updates shares in fifth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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