General Electric Shares Trade Higher on Earnings Beat

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General Electric Co. (GE) shares are trading 10% higher today after the company posted stronger than expected earnings for the fourth quarter. The stock rallied on the company’s 2020 outlook for industrial profits and free cash flow.

Net income came in at $538 million, down from $575 million or 7 cents per share year over year. Adjusted earnings came in at 21 cents per share above analyst estimates of 18 cents per share.

Total revenue for the year fell to $26.2 billion, down 1% year over year. Industrial free cash flow came in at $3.9 billion, lead by positive cash flow driven through contract assets. However, Power, Aviation, Renewable, Healthcare and Corporate revenues remain unchanged.

GE has a positive outlook in 2020. The 2020 fiscal year, GE expects Industrial FCF between $2 billion – $4 billion. They expect industrial margin to expand between $0 – 75bps with adjusted EPS between $0.50 – $.60 cents per share. This will be predicated on continued progress in power turnaround, Aviation and Healthcare backlog growth.

CEO, Larry Culp, said in a statement ”The fourth quarter marked a strong close to the year for GE. We met or exceeded our full-year financial targets and are on a positive trajectory for 2020. We’re proud of our progress in 2019. Including decisive actions to reduce our leverage and strengthen our businesses.” 

General Electric’s forward guidance will remain reliant on capital enhancements (Industrial FCF), assumed timing of BioPharma deal closure (Q1 2020), and Boeing 737 Max delivery profile and production schedule.

About General Electric

(GE) is an American multinational conglomerate corporation in New York City and headquartered in Boston. As of 2018, the company operates through the following segments: Aviation, Healthcare, Power, Renewable Energy, Digital Industry, Manufacturing, Venture Capital and Financing, and Lighting.

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