GE Boss Warns of Quarterly Cash Drain From Boeing MAX

By Thomas Gryta 

Larry Culp, chief executive of General Electric Co., cautioned investors that the manufacturing giant would burn about $2 billion in cash flow in the first quarter.

Mr. Culp cited pressure from the extended grounding and production halt of Boeing Co.'s 737 MAX aircraft. A GE joint venture with France's Safran SA makes the engines used on the jet.

Mr. Culp, speaking at an investor conference Wednesday, said there will be pressure on GE's ability to generate cash in the first half of the year but he expects GE to generate cash from operations later this year.

He hadn't previously provided a first quarter target, though he has forecast $2 billion to $4 billion in positive cash flow for the full year. A year ago, GE burned through $1.2 billion in cash during the first quarter of 2019 before ending the year with $2.3 billion of total cash flow from its industrial operations.

The cash flow pressure will likely result in first quarter earnings lower than last year, Mr. Culp said.

Mr. Culp also said a long awaited review of its legacy insurance holdings came in better than expected in the first quarter, with an expected $100 million charge to earnings.

(Updates to come)

Write to Thomas Gryta at [e-mail]

(END) Dow Jones Newswires

February 19, 2020 10:24 ET (15:24 GMT)

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