GE Boss Warns of Quarterly Cash Drain From Boeing MAX
February 19 2020 - 10:39AM
Dow Jones News
By Thomas Gryta
Larry Culp, chief executive of General Electric Co., cautioned
investors that the manufacturing giant would burn about $2 billion
in cash flow in the first quarter.
Mr. Culp cited pressure from the extended grounding and
production halt of Boeing Co.'s 737 MAX aircraft. A GE joint
venture with France's Safran SA makes the engines used on the
jet.
Mr. Culp, speaking at an investor conference Wednesday, said
there will be pressure on GE's ability to generate cash in the
first half of the year but he expects GE to generate cash from
operations later this year.
He hadn't previously provided a first quarter target, though he
has forecast $2 billion to $4 billion in positive cash flow for the
full year. A year ago, GE burned through $1.2 billion in cash
during the first quarter of 2019 before ending the year with $2.3
billion of total cash flow from its industrial operations.
The cash flow pressure will likely result in first quarter
earnings lower than last year, Mr. Culp said.
Mr. Culp also said a long awaited review of its legacy insurance
holdings came in better than expected in the first quarter, with an
expected $100 million charge to earnings.
(Updates to come)
Write to Thomas Gryta at thomas.gryta@wsj.com
(END) Dow Jones Newswires
February 19, 2020 10:24 ET (15:24 GMT)
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