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GE’s stock sinks after earnings beat expectations but FCF missed, and the outlook was a bit downbeat

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Shares of General Electric Co.
GE,
+0.91%

sank 3.2% in premarket trading Tuesday, after the industrial conglomerate reported first-quarter adjusted profit and revenue that beat expectations, but missed on free cash flow and provided a somewhat downbeat outlook. The net loss narrowed to 99 cents a share from $2.61 a share, in the year-ago period. Excluding nonrecurring items, such as restructuring and separation costs, adjusted earnings per share rose to 24 cents from 13 cents, above the FactSet consensus 18 cents. Total revenue slipped 0.2% to $17.04 billion, but was above the FactSet consensus of $16.85 billion. Free cash flow was negative $880 million, after negative $3.36 billion a year ago, and missed the FactSet consensus of $816.5 million. Among GE’s business segments, Aviation revenue rose and Renewable Energy and Power revenue fell, with those three segments missing expectations, while Healthcare revenue surprisingly rose to beat expectations. Chief Executive Larry Culp said that while it affirmed its 2022 outlook range provided in January, which included EPS of $2.80 to $3.50 and free cash flow of $5.5 billion to $6.5 billion, he said results were “trending toward the low end of the range” given inflation and other evolving pressures. GE’s stock has slipped 4.9% year to date through Monday, while the S&P 500
SPX,
+0.57%

has dropped 9.9%.

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