On Tuesday, January 10, 2017, a logo will be displayed next to a gas turbine at the General Electric Co. power plant. (GE) in Greenville, South Carolina, USA. General Electric Co. will publish the earnings figures on January 20. .
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Shares of General Electric were up more than 6% in premarket trading Tuesday after the company reported better than expected industrial free cash flow for the fourth quarter and a bright outlook for this year.
The company ended the fourth quarter with $ 4.37 billion in free industrial cash flow, a surprise after CEO Larry Culp estimated at least $ 2.5 billion for the last three months of the year. The strong quarter brought the company’s free cash flow to a positive level for the year.
GE also predicted it would generate between $ 2.5 billion and $ 4.5 billion in free industrial cash flow by 2021.
The company also reported fourth-quarter sales that slightly exceed analysts’ expectations, while profit falls short of estimates as the industrial giant continues to weather the coronavirus pandemic.
Here’s how GE performed compared to what Wall Street expected, based on average analyst estimates compiled by Refinitiv:
- Adjusted EPS: Expected 8 cents versus 9 cents.
- Revenue: $ 21.93 billion vs. $ 21.83 billion
The stock has been on a tear in recent months, fueled by a surprise third-quarter gain reported in October, pushing the stock up more than 70% in the fourth quarter. Positive Covid-19 vaccine news, which bodes well for the conglomerate’s beleaguered aviation sector, has supported the turnout.
And some investors are optimistic about the company’s turnaround under Culp, especially as he forecasts positive cash flow for 2021. The company has continued to pay off its debt during the pandemic and cut costs through layoffs in the aviation sector, for example.
“As 2020 progressed, we have significantly improved GE’s profitability and cash performance despite a still difficult macro environment,” Culp said in a statement. “The fourth quarter marked a strong free cash flow from a challenging year and reflects the results of better operations and strong and improving orders in Power and Renewable Energy.”
This story develops. Check back here for updates.