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Share Name Share Symbol Market Type
General Electric Company NYSE:GE NYSE Common Stock
  Price Change % Change Share Price High Price Low Price Open Price Shares Traded Last Trade
  0.125 1.18% 10.725 10.75 10.51 10.67 72,347,352 17:27:59

GE's Cost Cuts Offset Troubles in Aviation Unit

28/10/2020 12:02pm

Dow Jones News


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By Thomas Gryta 

The troubled aviation industry continued to weigh on General Electric Co., which reported another quarter of shrinking revenue, but the conglomerate posted a smaller loss and was able to generate cash from its industrial operations.

Layoffs and cost cutting have helped GE weather the damage from the coronavirus pandemic on the commercial airlines that ultimately buy its jet engines. Belt tightening has also helped reverse losses in GE's long-struggling power turbine unit.

While orders for new equipment fell in several of its key businesses, the company said it generated $514 million in industrial free-cash flow in the quarter ended Sept. 30. On that basis, the company also predicted it would generate $2.5 billion in cash in the fourth quarter.

The measure is closely watched as a sign of the health of the company's operations and ability to pay down debts. In the first half of the year, GE's industrial operations burned through $4.3 billion in cash.

"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," GE CEO Larry Culp said.

Mr. Culp recently had his second anniversary in the top job, where he has focused on cutting debt and generating more cash to turnaround the conglomerate. The pandemic hit the company hard because of its reliance on the air travel industry. Revenue fell nearly 40% in GE's aviation business in the latest quarter. The unit is cutting a quarter of its 52,000 workers.

Overall, GE reported revenue of $19.42 billion, down 17% from a year ago. Excluding its stake in the Baker Hughes oil business and other assets it sold, industrial revenue fell 12% to $17.88 billion.

The company had a net loss of $1.14 billion, before preferred stock dividends, compared with a loss of $9.42 billion a year ago when it booked hefty accounting charges on the Baker Hughes investment. Excluding restructuring and other charges, GE reported an adjusted profit of 6 cents a share.

Wall Street was expecting an adjusted loss of 4 cents a share on revenue of $18.7 billion.

Shares of GE rose about 5% in premarket trading.

Write to Thomas Gryta at thomas.gryta@wsj.com

 

(END) Dow Jones Newswires

October 28, 2020 07:47 ET (11:47 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.

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