General Electric rose on Wednesday after the industrial conglomerate raised its cash flow forecast for 2019 and reported adjusted third-quarter earnings and revenues that exceeded analysts' expectations. On an unadjusted basis, including certain accounting fees, GE still lost $ 9.5 billion in the quarter.
GE shares increased by 4% in premarket trading from the previous close of $ 9.07 per share.
This is what the company reported versus what Wall Street expected:
- EPS: adjusted $ 0.15 per share, versus $ 0.11 an expected share, according to analysts surveyed by Refinitive.
- Revenue: $ 23.36 billion, versus $ 22.93 billion expected, according to analysts polled by Refinitive.
"Our results reflect another quarter of progress in the transformation of GE," Chairman and CEO Larry Culp said in a statement.
GE's closely monitored Industrial Free Cash Flow (FCF), used as an efficiency meter, totals $ 650 million. In essence, FCF is money left over after a company pays for operating expenses and capital expenditures. The company increased its forecast for industrial FCF from 201
"We are raising our industrial free cash flow outlook even with external headwinds from 737 Max and Customs," said Culp.
Overall, GE reported a total net loss of $ 9.5 billion for the third quarter. While improved from an unadjusted $ 22.8 billion loss for the same period last year, the bottom line reveals that GE is still a struggling industrial conglomerate in the depths of a turnaround.
The company's combat power division saw quarterly revenue fall 14% year over year to $ 3.9 billion from $ 4.6 billion, as orders for turbines and other products fell by 30%. But Power had a $ 144 million loss, up 79% from the $ 676 million loss the unit reported for the same period last year.
"I'm relieved; you didn't really go into the quarter [what to expect from GE] especially with what's happening on Boeing," said Melius Research analyst Scott Davis on CNBC's "Squawk Box." Davis has a buy rating on GE's shares.
GE's most important aviation business recorded an 8% increase in revenue from the same quarter last year, to $ 8.1 billion from $ 7.5 billion. The company continues to warn that the Aviation Unit may see a cash flow hit by the ground support of the Boeing 737 MAX. GE makes the LEAP engines used on Boeing's best-selling aircraft. But GE sold 455 LEAP engines during the quarter, 50% more than the same time a year ago, though the company said it continues to "work through MAX" editions.