In Chief Executive Jeff Immelt's last report at the helm of General Electric Co., the company showed progress on reaching its cash-flow and cost-cutting goals.
GE has been under pressure to cut expenses after missing profit goals but Friday's results are a sign that the company is headed toward a successful turnaround. During its second quarter, GE cut $593 million in costs and said it was on track to meet its $1 billion savings goal by the end of the year.
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Cash flow in its industrial segment turned positive, jumping to $1.5 billion compared with a surprising negative $1.6 billion in the first quarter. Mr. Immelt said the company expects cash flow to continue to improve throughout the year.
In recent years, the company has turned its focus to its industrial businesses, shedding lower-margin units, like home appliances, and striking a big oil-and-gas deal with Baker Hughes Inc. last fall. Still, analysts are wary that GE will reach a long-term goal of delivering $2 a share in profit in 2018.
In all, GE's second-quarter earnings fell less than expected. The company reported a profit of $1.19 billion, or 15 cents per share, down from $2.76 billion, or 36 cents per share, a year earlier. On an adjusted per-share basis earnings fell to 28 cents from 51 cents a year earlier. Revenue fell 12% to $29.56 billion.
Analysts polled by Thomson Reuters were expecting adjusted earnings of 25 cents on $29.02 billion in sales.
The company also backed its prior guidance of fiscal 2017 earnings of $1.60 to $1.70 per share, and organic sales growth of 3% to 5%.
Shares were flat at $26.70 during premarket trading. The stock is down about 16% so far this year.
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(END) Dow Jones Newswires
July 21, 2017 07:29 ET (11:29 GMT)