General Electric Co. shored up its cash performance as Jeffrey Immelt tackled one of investors' most pointed concerns in his final days as chief executive officer.
Industrial operating cash flow rose to $1.5 billion in the second quarter, GE said in a statement on Friday as it reported earnings. Immelt had promised the metric would rebound after a surprise plunge during the first three months of the year rattled investors in the maker of jet engines, gas turbines and medical scanners.
Cash flow was "significantly better" than the equivalent figure in the first quarter, Immelt said in the release. "We expect cash flow to continue to improve throughout the year."
The results give the departing CEO a boost as he prepares to hand the reins to John Flannery. The Boston-based manufacturer, under pressure from activist investor Trian Fund Management, recently agreed to deepen cost cuts as it contends with feeble demand in some markets and persistently low oil prices.
GE rose less than 1 percent to $26.89 in New York before regular trading. The shares plunged 16 percent this year throughout Thursday, while the Standard & Poor's 500 Index climbed 10 percent.
Flannery, a GE veteran, has said he will make cash flow a focus when he takes the helm on Aug. 1. GE set off alarm bells after reporting negative $1.6 billion in industrial operating cash flows in the first quarter, as working capital increased.
That was about $1 billion worse than the company had anticipated. Second-quarter adjusted earnings fell to 28 cents a share.
That exceeded the 25 cent average of analysts' estimates compiled by Bloomberg. Sales dropped 12 percent to $29.6 billion, compared with $29.2 billion expected by analysts.
At GE Power, the world's largest maker of gas turbines, revenue climbed 5 percent. Sales were little changed at GE
Aviation and slid 3 percent in the oil and gas unit, which has struggled amid the plunge and sluggish recovery of crude prices.
GE this month closed a deal to combine the division with Baker Hughes, a move to broaden product offerings and help the companies capitalize on an eventual rebound. GE owns 62.5 percent of the new entity.
Immelt has been reshaping the portfolio and tightening operations amid pressure from Trian. Nelson Peltz's firm took a stake in GE in 2015 after Immelt unveiled a plan to shed financial businesses and tilt the company toward equipment manufacturing.
Operating earnings in 2017 will be $1.60 to $1.70, GE said, reaffirming an earlier forecast.
* Bloomberg
Company%20Profile
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Company%20Profile
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Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, (Leon banned).
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
COMPANY%20PROFILE
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Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
Ms Yang's top tips for parents new to the UAE
- Join parent networks
- Look beyond school fees
- Keep an open mind
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
The biog
Family: wife, four children, 11 grandchildren, 16 great-grandchildren
Reads: Newspapers, historical, religious books and biographies
Education: High school in Thatta, a city now in Pakistan
Regrets: Not completing college in Karachi when universities were shut down following protests by freedom fighters for the British to quit India
Happiness: Work on creative ideas, you will also need ideals to make people happy
Company: Instabug
Founded: 2013
Based: Egypt, Cairo
Sector: IT
Employees: 100
Stage: Series A
Investors: Flat6Labs, Accel, Y Combinator and angel investors
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
