A logo is displayed next to a gas turbine at the General Electric Co. power plant. (GE) of Greenville, South Carolina, USA, Tuesday, January 10, 2017. General Electric Co. is scheduled to release revenue figures on January 20th.
Sharrett / Bloomberg / Getty Images
Shares of General Electric rose more than 6% in premarket trading on Tuesday, after the company reported better-than-expected industrial cash flow for the fourth quarter and a rosy outlook for this year.
The company closed the fourth quarter with $ 4.37 billion in free industrial cash flows, a surprise after CEO Larry Culp projected at least $ 2.5 billion in the last three months of the year. The strong quarter pushed the company’s industrial cash flow into positive territory for that year.
GE has also projected that it will generate between $ 2.5 billion and $ 4.5 billion of free industrial cash flows by 2021.
The company also reported revenue for the fourth quarter that slightly exceeded analysts’ expectations, while its profits fell below estimates as the industrial giant continues to withstand the coronavirus pandemic.
Here’s how GE performed compared to what Wall Street expected, based on average estimates from analysts compiled by Refinitiv:
- Adjusted EPS: 8 cents versus the expected 9 cents.
- Revenue: $ 21.93 billion compared to $ 21.83 billion
The stock has been down in recent months, driven by a surprising third-quarter profit reported in October, which caused the stock to grow by more than 70% in the fourth quarter. Positive news about the Covid-19 vaccine, which bodes well for the conglomerate’s besieged aviation sector, has supported growth.
And some investors are aggressive about the company’s turnover under Culp, especially as it expects a positive cash flow for 2021. The company continued to pay its debts during the pandemic and reduce costs, for example, layoffs in its business aviation.
“As 2020 progresses, we have significantly improved the profitability and performance of GE’s cash, despite a still difficult macro environment,” Culp said in a statement. “The fourth quarter marked a strong flow of free cash to a challenging year, reflecting better operating results, as well as strong and improved orders in energy and renewable energy.”
This story is developing. Come back here for updates.