GE Reports Surge in Year-End Cash Flow
26 January 2021 - 11:24PM
Dow Jones News
By Thomas Gryta
General Electric Co. reported $4.4 billion in fourth-quarter
cash flow, beating its own projection and ending 2020 without
burning cash, a year ahead of schedule.
The Boston conglomerate said the surge of cash came from orders
in its power and renewables divisions, along with improved
financial efficiency. The company has been cutting corporate costs
and jobs in its aviation unit while streamlining its power
business.
The coronavirus pandemic continues to pressure GE's jet-engine
business, its largest division, but the overall results showed
progress in the yearslong turnaround of the company that also makes
health-care machines and power-generating equipment.
GE shares are up 60% in the last six months, closing Monday at
$10.99, as investors are encouraged by continued improvement in
cash flow, debt reduction and cost cutting. The S&P 500 index
is up about 20% in the same period. GE shares gained about 4% in
premarket trading Tuesday.
GE's cash flow is closely watched as a sign of the health of the
company's operations and ability to pay down debts. The company had
predicted fourth-quarter cash flow of at least $2.5 billion. The
company burned through $4.3 billion in cash in the first half of
the year.
For the full year, GE reported lower revenue after shedding
units, but positive cash flow of about $600 million from its
industrial operations. GE forecast $2.5 billion to $4.5 billion of
cash flow for 2021.
Write to Thomas Gryta at thomas.gryta@wsj.com
(END) Dow Jones Newswires
January 26, 2021 07:09 ET (12:09 GMT)
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