General Electric reported better-than expected fourth-quarter results as Larry Culp, the third CEO in as many years, worked to rebuild the beleaguered company, sending shares higher ahead of the opening bell.
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The Boston-based conglomerate earned $728 million, or 6 cents a share, as revenue slipped 1 percent to $26.2 billion. Wall Street analysts surveyed by Refinitiv were expecting adjusted earnings of 18 cents a share on revenue of $25.59 billion.
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Profit excluding items such as restructuring costs and the impact of tax law changes, was 21 cents, topping the 18-cent average of estimates from analysts surveyed by Refinitiv.
“We met or exceeded our full-year financial targets and are on a positive trajectory for 2020,” Culp said in a statement.
Sales from existing businesses in the company's manufacturing businesses rose 5.5 percent to $88 billion for the year. Those operations generated free cash flow of $2.3 billion, beating the company's $0 to $2 billion forecast.
For this year, GE expects industrial free cash flow to be between $2 billion and $4 billion. The conglomerate sees industrial revenues growing in the low single digits and adjusted earnings of 50 cents to 60 cents a share. The outlook is dependent on when Boeing's 737 MAX returns to service as GE supplies engines for the aircraft.
General Electric shares were up 5.1 percent this year through Tuesday, outpacing the S&P 500's 1.4 percent gain.
GE, once an industrial icon, is in the midst of restructuring its business after shares lost more than half their value in 2018 amid challenges in the power business, where former CEO Jeff Immelt had invested heavily. The battered company's restructuring plan has aimed to reduce debt by selling non-core assets.
The turnaround plan has included GE divesting its stake in the rail parts manmufacturer Wabtec and part of its ownership in the oil field service provider Baker Hughes. General Electric also completed more than $9 billion of deleveraging at GE Capital and in October 2018 took a $23 billion writedown on its power business.