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General Electric has come out with an “upbeat outlook for its business” as it reported an increment in “quarterly free cash flow”. The industrial conglomerate’s “free cash flow” prediction was of “$2.5 billion to $4.5 billion this year” following the cash flow generation of “$4.4 billion in the fourth quarter”.
In comparison, analysts at Refinitiv had estimated an average of “$3.03 billion for 2021 and about $2.6 billion for the latest quarter”. Earlier, the company’s prediction involved a minimum cash flow of “$2.5 billion” for Q4 along with a “return to positive cash flow for 2021”. Free-cash flow attracts close attention from the investors as a health indicator of “GE’s operations and ability to pay down debt”.
The chief executive, Larry Culp told the investors:
“In all, momentum is growing across our businesses”.
Culp became the company’s C.E.O in 2018 and since then he is making efforts to “revive GE’s fortunes” through the improvement of “free cash flow and cutting debt”. Nevertheless, the pandemic hindered the above mentioned efforts as the aviation unit of the company, which happens to be the “most profitable and most cash-generative segment”, took a hit.
To deal with the issue, Culp slashed down costs by over “$2 billion” besides working to same “$3 billion in cash last year”. With the increased cash flow, the “lingering liquidity concerns” have disappeared. While, GE also added that the revenue from its aviation business is likely to continue flat even this year as it is likely to pick up only in the second half of the year.
In fact, “Boeing Co’s 737 MAX jets” coming into business will also help GE as the former uses the latter’s engines. As a result, GE is looking into an improvement in “its industrial business this year”.
References:
reuters.com
In comparison, analysts at Refinitiv had estimated an average of “$3.03 billion for 2021 and about $2.6 billion for the latest quarter”. Earlier, the company’s prediction involved a minimum cash flow of “$2.5 billion” for Q4 along with a “return to positive cash flow for 2021”. Free-cash flow attracts close attention from the investors as a health indicator of “GE’s operations and ability to pay down debt”.
The chief executive, Larry Culp told the investors:
“In all, momentum is growing across our businesses”.
Culp became the company’s C.E.O in 2018 and since then he is making efforts to “revive GE’s fortunes” through the improvement of “free cash flow and cutting debt”. Nevertheless, the pandemic hindered the above mentioned efforts as the aviation unit of the company, which happens to be the “most profitable and most cash-generative segment”, took a hit.
To deal with the issue, Culp slashed down costs by over “$2 billion” besides working to same “$3 billion in cash last year”. With the increased cash flow, the “lingering liquidity concerns” have disappeared. While, GE also added that the revenue from its aviation business is likely to continue flat even this year as it is likely to pick up only in the second half of the year.
In fact, “Boeing Co’s 737 MAX jets” coming into business will also help GE as the former uses the latter’s engines. As a result, GE is looking into an improvement in “its industrial business this year”.
References:
reuters.com
