Is GE finally turning the corner?
GE posted an unexpectedly strong first-quarter earnings report Friday, thanks in part to successful cost cutting, offering a glimmer of hope that the ailing industrial conglomerate will turn itself around.
GE earned $0.16 per share (adjusted) in the quarter, topping analysts’ expectations for $0.11. Revenue came in at $28.66 billion, surpassing the Thomson Reuters forecast for $27.45 billion.
Perhaps most importantly, the company reaffirmed its 2018 guidance, despite some expectations for a cut.
“The first quarter is a step forward in executing on our 2018 plan and we are seeing signs of progress in our performance," said CEO John Flannery. Industrial earnings, free cash flow, and margins all improved year over year. We reduced Industrial structural costs by $805 million and are on track to exceed our cost reduction goal of $2 billion in 2018.”
Flannery added that, “We are making significant progress on the $20 billion of dispositions planned for 2018 & 2019. There is no change to our framework for 2018.”
On the conference call discussing the results, Flannery added that the company is in “lots of active discussions” relating to asset sales.
He mentioned that the company should beat its $2 billion cost-cutting target for the year.
Before the earnings conference, Robert Nardelli, a past GE executive, told Fox Business’ Maria Bartiromo on "Mornings with Maria" that these were very positive results, while he sees more opportunity ahead.
“Overall solid report, good progress and I am seeing opportunities for further progress,” Nardelli said.
GE CFO Jamie Miller, while discussing the company’s financials, reiterated that the company had recast its financials, and noted that the company has simplified its financial reports, including reporting adjusted earnings per share, which is the metric used by Wall Street analysts as they estimate expected earnings.
GE was previously critiqued for complicated financial reports, which were difficult for retail investors to comprehend.
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GE’s executives said that they are now expecting full-year EPS at the bottom of their forecasted range. Flannery concluded the call by congratulating the GE team for the performance, but added, “At the end of the day the only thing that matters is delivering the full-year results.”