Low-key Larry

30 October 2019 By John Foley Follow @johnsfoley

GE is leaner and less indebted. Its jet and health divisions grew in the third quarter and cash flows are improving. Culp’s predecessors specialized in big gestures. If he can just keep GE on a stable path, with fewer one-offs and write-downs, he’ll be its best chief in decades.

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General Electric said on Oct. 30 revenue for the third quarter hadn’t grown from the same period a year earlier, but raised its full-year target for generating cash from its industrial businesses for the second time in 2019.

The U.S. conglomerate expects to make up to $2 billion in free cash flow from its industrial businesses in 2019, compared with its earlier forecast of somewhere between negative $1 billion and positive $1 billion.

GE’s industrial revenue increased 7% to $21.5 billion after stripping out currency moves and the effect of selling businesses. Chief Executive Larry Culp has been divesting divisions including railway equipment and the company’s stake in oil-services company Baker Hughes.

Earnings per share of $0.15, adjusted for one-offs like goodwill impairments, beat analyst forecasts’ of $0.11 per share, according to Refinitiv.

The sale of shares of Baker Hughes for $3 billion incurred an $8.7 billion pre-tax write-down, and left GE’s stake at 37%. The company also took a $1 billion charge relating to its insurance operations, and a $740 million impairment on its hydroelectric power segment.

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Earnings per share of $0.15, adjusted for one-offs like goodwill impairments, beat analyst forecasts’ of $0.11 per share, according to Refinitiv.

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