A logo is displayed next to a gas turbine at the General Electric Co. (GE) power plant in Greenville, South Carolina, USA, on Tuesday, January 10, 2017. General Electric Co. is scheduled to release financial results on January 20.
Sharrett / Bloomberg / Getty Images
General Electric’s shares rose more than 6% in Tuesday’s pre-market after the company reported better-than-expected industrial free cash flow for the fourth quarter and an optimistic outlook for this year.
The company ended the fourth quarter with $ 4.37 billion in industrial free cash flow, a surprise after CEO Larry Culp projected at least $ 2.5 billion in the last three months of the year. The strong quarter pushed the company’s free industrial cash flow into positive territory for the year.
GE also projected that it would generate between $ 2.5 billion and $ 4.5 billion in free industrial cash flow for 2021.
The company also reported fourth-quarter revenue that slightly exceeded analysts’ expectations, while its profits fell short of estimates, as the industrial giant continues to resist the coronavirus pandemic.
See how GE fared compared to what Wall Street expected, based on average analyst estimates compiled by Refinitiv:
- Adjusted EPS: 8 cents versus 9 cents expected.
- Revenue: $ 21.93 billion vs $ 21.83 billion
The stock has seen an upturn in recent months, driven by a surprising third-quarter profit reported in October, which caused the stock to rise more than 70% in the fourth quarter. Positive news about the Covid-19 vaccine, which bodes well for the conglomerate’s beleaguered aviation sector, supported the increase.
And some investors are optimistic about the company’s recovery under Culp, especially as it expects positive cash flow for 2021. The company continued to pay its debts during the pandemic and cut costs through, for example, layoffs in its business. aviation.
“As 2020 progressed, we significantly improved GE’s profitability and cash performance, despite a still difficult macro environment,” Culp said in a statement. “The fourth quarter marked the end of strong free cash flow for a challenging year, reflecting the results of better operations, as well as strong orders and improvements in energy and renewable energy.”
This story is developing. Check back here for updates.