Significant charges incurred during quarter related to GE restructuring effort
By Michelle Chapman
AP Business Writer
One year into the job at General Electric, there are signs that CEO Larry Culp’s plan to transform General Electric into a sleeker company is paying off.
GE raised its projections for industrial free cash flow Wednesday despite a damaging trade fight and ongoing problems with Boeing’s 737 Max.
That industrial business is at the core of what GE wants to become and it’s been shedding billions of its assets in other divisions to get there.
The Boston company reported a loss of $9.42 billion, or $1.08 per share, for the period ended Sept. 30. But there were significant charges during the quarter related to a massive restructuring effort at GE.
Removing one-time costs, per share earnings were 15 cents, 3 cents better than Wall Street had expected, according to a survey by Zacks Investment Research.
The losses this third quarter were less than half of last year’s $22.8 billion.
GE took a $8.7 billion charge related to its diminishing involvement with the oilfield services company Baker Hughes, and almost $2 billion in charges related to financial and power businesses.
“We have more work to do, and we will continue to take actions to improve our financial position and strengthen our businesses as we prepare for 2020 and beyond,” Culp said in a prepared statement. “I remain confident that we will unlock value for GE’s stakeholders as our transformation accelerates.”
Culp became CEO last October after John Flannery was forced out. Since then, shares of General Electric Co. are up 27%. Shares jumped 7% before the opening bell Wednesday.
GE said it is making progress in cleaning up its troubled power division and its focus on its industrial core is bearing fruit.
While overall revenue was flat at $23.36 billion, industrial segment organic revenues rose 7%.
In July the company anticipated its full-year industrial free cash flow would be negative $1 billion to positive $1 billion. On Wednesday it painted a rosier picture, saying it now expects industrial free cash flow would be flat to $2 billion.
The company expects that cash flow to remain in positive territory next year, and that it will accelerate in 2021.
Revenue for the aviation segment rose 8%, with GE saying it continues to work closely with Boeing to ensure the timely and safe return to service of the 737 Max.
GE helps make engines for Boeing’s 737 Max planes and took a hit after the plane was grounded following two deadly crashes.
Total orders increased 5%, while backlog grew 14%.
