reported a second-quarter loss and flat sales, but said it was making progress in restructuring its long-struggling Power division and raised its full-year financial projections.
GE also said its finance chief, Jamie Miller, will be leaving her role and the company is beginning a search for a replacement. Ms. Miller, who has been CFO since October 2017, will stay in her role during the transition, the company said.
Jamie Miller, departing finance chief
Christopher Millette/Associated Press
The conglomerate now expects adjusted cash flow for 2019 ranging from negative $1 billion to positive $1 billion, an improvement from previous guidance of negative cash flow of as much as $2 billion from its core industrial operations.
Cash is in focus for management and investors as the company has cut its dividend twice in recent years stemming from deep problems in its Power business and financial-services division. In the second quarter, GE reported negative $1 billion in cash flow from industrial operations, at the low end of its own target.
“We made steady progress on our strategic priorities,” said CEO Larry Culp said in a news release. He stepped into the top job 10 months ago with a focus on the company’s Power division and cutting GE’s massive debt load. “We will continue to take planned actions to improve our businesses and monitor some market headwinds,” he said.
In the second quarter, GE reported a net loss attributable to common shareholders of $61 million, compared with a year ago profit of $615 million. Revenue fell 1% to $28.83 billion, as a sharp decline in the Power division, which makes turbines for power plants, offset gains in Aviation and other units.
GE booked a $744 million pretax impairment charge to move some assets from its electrical-grid division into its renewable-energy division. Excluding that charge and including a 6-cent a share benefit from resolving a tax audit, GE said its adjusted earnings were 17 cents a share, ahead of an analyst projection of 12 cents a share, according to Refinitiv.
GE shares rose about 5% to $11 in early premarket trading Wednesday. Before the earnings release, the stock had rallied more than 40% this year, but was down about 17% in the last 12 months. Two years ago, GE shares traded at close to $25.
The company has positioned 2019 as a “reset year” as its undergoes a restructuring. In the latest quarter, revenue fell 25% at its Power unit and the unit’s profits tumbled. The other major business units fared better, with revenue rising 5% in its Aviation unit, which makes jet engines, and slipping 1% in the health-care division, which makes hospital equipment.
GE has been shrinking its finance unit and selling assets to pay down its debt, including cutting a deal to sell its biotechnology business for more than $20 billion earlier this year. In the second quarter, GE raised $1.8 billion in cash by selling half of its 25% stake in Westinghouse Air Brake Technologies, or Wabtec, which merged with GE Transportation this year.
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