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Monday, January 18, 2021

General Electric’s revenue slides 17% in the fiscal third quarter.

  • General Electric’s revenue slides 17% in the fiscal third quarter.
  • The American multinational reports £920 million of net loss in Q3.
  • General Electric’s cash flow also turned positive in the third quarter.

General Electric Co. (NYSE: GE) said on Wednesday that its revenue in the fiscal third quarter contracted less than expected. The company also reported an unexpected profit on an adjusted basis. Its cash flow also came in positive in Q3.

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General Electric jumped about 5% in premarket trading on Wednesday and gained another 3% on market open. On a year to date basis, shares of the company are now about 35% down in the stock market.

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General Electric’s Q3 financial results versus analysts’ estimates

General Electric said that its net loss in the third quarter printed at £920 million that translates to 10.77 pence per share. In the same quarter last year, it had reported a significantly higher £7.29 billion of loss or 83 pence per share. Earlier in October, GE expressed commitment to pulling out of coal-fired power plants and shift to renewable sources for power.

Adjusted for one-time items, General Electric earned 4.62 pence per share in the recent quarter versus the year-ago figure of 11.54 pence per share. In comparison, analysts had anticipated the company to register 3.08 pence of loss per share in Q3, as per FactSet.  

The American multinational conglomerate valued its industrial free cash flow £395.53 million versus negative £790 million expected. In terms of revenue, General Electric recorded £14.94 billion that represents a 17% annualised decline. FactSet Consensus for GE’s revenue in Q3 stood at a lower £14.41 billion. In the prior quarter (Q2), the Boston-based company had reported £13.62 billion of revenue.

Other prominent figures in General Electric’s earnings report

Other prominent figures in General Electric’s earnings report on Wednesday include a 3% decline in power revenue to £3.10 billion. Revenue from renewable energy saw a 2% year over year decline to £3.49 billion. At £3.79 billion, aviation revenue tanked 39% in the third quarter while healthcare revenue was 7% lower than last year at £3.52 billion.

According to FactSet, experts had forecast revenue from these four segments at £2.99 billion, £3.45 billion, £3.81 billion, and £3.19 billion, respectively. CEO Larry Culp commented on the financial report on Wednesday and said:

“We are improving our profit and cash performance with organic margin expansion in every segment except Aviation, though orders more broadly remain under pressure.”

In an estimate last month, Culp had estimated free cash flow to be positive in the fiscal second half. At the time of writing, General Electric is valued at £52.40 billion.

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