General Electric Co. suffered a quarterly loss of approximately $ 2 billion as revenue fell 24%, resulting in a sharp decline in the jet engine business caused by the coronavirus pandemic.
The aviation business, which once received GE’s profit engine, plunged into a loss in June as both revenue and orders fell. The unit produces engines for Boeing Co. and Airbus SE aircraft, but had to cut production and jobs as airlines delayed orders. Boeing said on Wednesday it would cut further production of commercial aircraft.
GE said it burned less cash in June than it had previously warned. The company reported adjusted negative cash flow from industrial operations of $ 2.1billion, compared to forecasts of $ 3.5 billion to $ 4.5 billion in May. Analysts expected a negative $ 3.29 billion, according to FactSet.
“We are still working in a difficult Covid-19 environment,” said CEO Larry Culp, adding that he still hopes for a long-term recovery in the commercial aviation business. “However, based on what we see today and the actions taken, a consistent improvement in revenue and cash can be achieved in the second half of the year.”
GE also stated that it expects that by 2021. Positive cash flows will return. Investors are closely monitoring this measure after it was difficult to make cash, forcing the company to reduce its dividends and sell business units. May. She sold her century-old GE Lighting device, the last link to consumers.
Interview with p. Culp said the months improved during the quarter, citing an increase in aircraft departures and increased use of GE healthcare scanning equipment. He said the company’s production facilities and service groups had returned to “almost full capacity” since the beginning of the quarter. However, uncertainties about the wider economy and the pandemic remain.
“Covid is an extraordinary foundation for each of their operating companies in terms of data, trends and how governments and society will react when we fall into a downturn,” he said.
This conglomerate renewed its responsibilities under the direction of Mr. Culpui, in order to reduce debt and earn more cash, but was hit hard by the coronavirus crisis that led to the April crisis. It has benefited from a full-year financial perspective. GE plans to cut by 2020 Spending more than $ 2 billion, and Mr. Culpas does not rule out the loss of additional jobs.
“We want to be realistic that this is an extremely complex environment,” he said. “That was true in the second quarter and will be true as we move forward, so we will continue to look for opportunities to cut costs and save cash.”
On Wednesday, GE announced plans to sell the remaining three-year stake in oil and gas company Baker Hughes. GE said it reduced its debt by $ 9.1 billion this year and had $ 41 billion in cash at the end of June.
Profits and sales of GE’s key divisions decreased compared to last year. Revenue fell 44 percent. In the aviation block, 3 percent. – from renewable energy and 11% – in the energy segment producing power plant turbines. All three suffered a loss. Revenue fell 21 percent. He earned operating profits for the healthcare division, which manufactures hospital equipment and was the only division of the industry.
Overall, GE’s net loss attributable to ordinary shareholders was $ 2.18 billion, compared to a loss of $ 61 million a year ago. Revenue was $ 17.75 billion. Previous years ’results include GE’s biopharmaceutical business, which it sold earlier this year, and a former controlling stake in Baker Hughes.
GE recorded more than $ 2.3 billion in taxes in the last quarter, writing off several assets, including the industrial 3D printing business, GE Capital’s jet lease business and some long-term service contracts. These taxes were partially offset by the investment return on Baker Hughes’ shareholding.
Excluding items, GE reported an adjusted loss of 15 cents per share compared to Wall Street’s estimate of a loss of 10 cents per share.
The aerospace business has been GE’s largest and most profitable in recent years as it has leveraged a thriving aerospace market and investment, including the launch of GE’s most advanced engine, to power a Boeing Co. MAX jet. However, after MAX-based and airline cancellations, GE said quarterly orders for new equipment fell 41 percent and services by 67 percent from a year ago.
American Airlines Group Inc. and Southwest Airlines Co. said this month that they are rejecting expectations of air travel recovery as the pandemic spreads to parts of the United States.
GE, which started the year with about 205,000 employees, has already announced plans to cut a quarter of its aviation division, which employed 52,000 people. The company said it reduced 5,400 aviation workers during the quarter.
GE’s stock traded little on Wednesday before trading, rising to 11 cents to $ 7.01. Shares have fallen about 40% since the beginning of the year. Shares fell in 2017 and 2018, when GE revealed serious problems in its power unit and share capital that forced it to cut dividends and sell the business. 2018 October month. GE has hired Mr. Culpa as CEO and he has made progress in streamlining pre-pandemic operations.
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