GE Posts Lower Sales, Loss on Restructuring Moves -- Update
April 27 2021 - 8:17AM
Dow Jones News
By Thomas Gryta
General Electric Co. reported lower revenue and a loss in its
first quarter as the company's jet-engine business and divestitures
weighed on its latest financial results.
GE's revenue fell 12% to $17.1 billion, reflecting a 28% decline
in its aviation unit and a 9% drop in its healthcare unit after
selling off part of the business. The company had a quarterly net
loss of $2.8 billion, compared with a profit of $6.2 billion a year
ago. The results include a $2.9 billion loss from the planned sale
of GE Capital's jet leasing business.
The industrial company said excluding discontinued operations
and other one-time charges its industrial free cash flow was
negative $845 million in the first quarter, an improvement from
burning $2.2 billion in the year-ago period. On that basis, it had
adjusted earnings of 3 cents a share, compared with analysts'
forecasts for a 1-cent profit.
GE backed its previous 2021 financial projections, including
cash flow of $2.5 billion to $4.5 billion from the industrial
operations, along with adjusted earnings of 15 cents to 25 cents a
share.
The company has been slashing costs in its aviation unit and
streamlining its power business, while shrinking its debt load
through asset sales including the deal to shed its jet leasing
business last month.
GE shares are up 84% in the last six months, closing Monday at
$13.57. The S&P 500 index is up about 21% in the same period.
The stock fell about 2% in premarket trading Tuesday.
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
healthcare machines and power-generating equipment.
The aviation division's revenue fell 28% to $5 billion. GE has
previously said it expects the aviation market to begin recovering
in the second half with 2021 revenue in the division flat or higher
from 2020 levels.
Airline executives have different views on how quickly pent-up
demand for travel could return. Some are gearing up for what they
hope will be a surge in summer vacations. U.S. airlines have also
resumed flying Boeing Co.'s 737 MAX jets, whose prolonged grounding
hurt a GE joint venture that supplies the plane's engines.
Revenue in the healthcare division, which makes CT scanners, MRI
machines and other hospital equipment, fell 9% to $4.3 billion. The
company said revenue rose 7% in the unit excluding the sale of its
biopharma operations in early 2020. GE said demand for ultrasound
machines was strong and some elective procedures had returned to
pre-pandemic levels.
The aviation and healthcare units generated operating profits in
the quarter while GE booked losses from its power and renewable
energy units as well as the shrinking GE Capital. Revenue fell 3%
in the power unit, which makes turbines for power plants, to $3.9
billion, while revenue in the renewable energy unit, which mostly
makes wind turbines, rose 2% to $3.2 billion.
Write to Thomas Gryta at thomas.gryta@wsj.com
(END) Dow Jones Newswires
April 27, 2021 08:02 ET (12:02 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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