GE Records Lower Sales, Loss During Restructuring – Update
By Thomas Gryta
General Electric Co. posted lower revenues and a loss in the first quarter as the company’s jet engine business and divestitures weighed on its latest financial results.
GE’s revenue fell 12% to $ 17.1 billion, reflecting a 28% drop in its aviation unit and a 9% drop in its healthcare unit after the sale of part of the activity. The company posted a quarterly net loss of $ 2.8 billion, compared to a profit of $ 6.2 billion a year ago. The results include a loss of $ 2.9 billion from the planned sale of GE Capital’s aircraft leasing business.
The industrial company said that excluding discontinued operations and other non-recurring charges, its industrial free cash flow was negative $ 845 million in the first quarter, an improvement over Combustion of $ 2.2 billion. one year ago. On that basis, he had adjusted earnings of 3 cents per share, compared to analysts’ forecasts for a profit of 1 cent.
GE backed its previous financial projections for 2021, including cash flow of $ 2.5 billion to $ 4.5 billion from industrial operations, as well as adjusted earnings of 15 to 25 cents per share.
The company has cut costs at its aerospace unit and streamlined its electrical business, while reducing debt through asset sales, including the agreement to cease its jet leasing business last month.
Shares of GE have risen 84% in the past six months, closing Monday at $ 13.57. The S&P 500 Index is up about 21% over the same period. The stock fell about 2% in pre-market trading on Tuesday.
The coronavirus pandemic continues to put pressure on the jet engine business of GE, its largest division, but overall results have shown progress over years of recovery for the company which also makes healthcare machinery and power generation equipment.
The aerospace division’s revenues fell 28% to $ 5 billion. GE has previously said it expects the aviation market to start recovering in the second half of the year with 2021 revenue in the division stable or above 2020 levels.
Airline executives have different views on how quickly pent-up travel demand could return. Some are preparing for what they hope will be an increase in summer vacation. U.S. airlines have also resumed the flight of Boeing Co.’s 737 MAXs, whose prolonged grounding affected a GE joint venture that supplies the aircraft’s engines.
Revenues for the healthcare division, which manufactures CT scanners, MRI scanners and other hospital equipment, fell 9% to $ 4.3 billion. The company said sales rose 7% at the unit excluding the sale of its biopharmaceutical business in early 2020. GE said demand for ultrasound machines was strong and some elective procedures had reverted to pre-pandemic levels.
The aviation and healthcare units generated operating profit in the quarter, while GE recorded losses on its power and renewable energy units as well as the decline in GE Capital. Revenues from the power unit, which makes turbines for power plants, fell 3% to $ 3.9 billion, while revenues from the renewable power unit, which mainly manufactures wind turbines , rose 2% to $ 3.2 billion.
Write to Thomas Gryta at [email protected]
(END) Dow Jones News Wire
April 27, 2021 8:02 am ET (12:02 pm GMT)
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