An employee of General Electric works on a gas turbine at the GE plant in Belfort, France.
Sebastien Bozon | AFP | Getty Images
General Electric reported second-quarter earnings on Wednesday that were slightly better than Wall Street expected.
GE shares rose 1.6% in premarket trading from its previous close of $10.52 a share.
Expectations vs. results:
- EPS: 17 cents a share vs. 12 cents a share according to analysts surveyed by Refinitiv.
- Revenue: $28.83 billion vs. $28.68 billion according to analysts surveyed by Refinitiv.
Investors will be also looking to the company’s metric of industrial free cash flow — money left over after a company pays for operating expenses and capital spending. Especially in the case of GE, industrial free cash flow is used as a gauge of efficiency. Earlier this year GE forecast that 2019 industrial free cash flow would be between flat and negative $2 billion, while J.P. Morgan analyst Stephen Tusa said GE gave “an implied guidance” that second-quarter free cash flow would be between a negative $1 billion to negative $2 billion.
CEO Larry Culp tempered investor expectations for this year in previous comments, as he seeks to turn GE around. The company’s struggling power business “is in a serious turnaround mode,” Culp said in March, and GE expects the market for gas-powered turbines will remain stagnant through 2020.
Despite Culp’s warnings, GE shares are up nearly 45% this year — on pace for its best year since 1999.