GE Shares Rising on Earnings and Sales, Surprising Turnaround to Positive Free Cash Flow

Shares of General Electric Co. GE,
rose 4.0% in premarket trading Tuesday after the industrial conglomerate reported second-quarter earnings and revenue that beat expectations and surprisingly generated positive free cash flow. On a net basis, loss per share fell from 26 cents to 14 cents, excluding one-time items, GE went to adjusted EPS of 5 cents from a loss of 14 cents to beat the FactSet EPS consensus of 3 cents . Revenue rose 9% to $18.28 billion, above the FactSet consensus of $18.14 billion. Industrial free cash flow was about $400 million positive, compared to the FactSet consensus of $338.3 million negative, and the company increased the FCF guidance for 2021 from $2.5 billion to $4.5 billion from $3 .5 billion to $5.0 billion. Of GE’s business segments, Aviation revenue increased 10% to $4.84 billion, but was below the FactSet consensus of $5.16 billion; Healthcare revenues grew 14% to $4.85 billion, well above expectations of $4.30 billion; Energy revenues grew 3% to $4.30 billion from expectations of $4.09 billion and renewable energy revenues grew 16% to $4.05 billion ahead of expectations of $3.87 billion to surpass. “Momentum is growing across all our businesses, driven by Healthcare and services in general, with Aviation showing early signs of recovery,” said Chief Executive Lawrence Culp. Shares of GE are up 19.6% through Monday, while the SPDR Industrial Select Sector ETF XLI,
gained 17.0% and the S&P 500 SPX,
has risen 17.7%.