GE Reports Q3 Losses Due To Restructuring But Sets High Expectation For Future
General Electric (GE) reported losses in the third quarter due to restructuring costs, but raised its cash flow expectations for the rest of the year, according to The Wall Street Journal.
GE reported losses of more than $9 billion in Q3 due to accounting charges from the ongoing restructuring process at the auto giant. On the contrary, the company's core operations generated cash. GE also raised its cash-flow expectations for the rest of the year, alluding towards as much as $2 billion at the end of the fiscal year.
Cash flow has been one of the most important indicators for future success when analyzing GE. GE has struggled recently and was required to cut its dividend. GE reported cash flow from industrial operations at $650 million in Q3 and predicts that it could generate up to $2 billion of cash.
In Q3, GE reported a net loss of $9.47 billion, compared to losses of $22.8 billion one year prior. Larry Culp, Chief Executive of GE, has been in his position for about a year now and has attempted to decrease debt and increase revenue by producing more jet engines and power turbines. “I’m starting to see the improvements I wanted to see when we started on this path a year ago,” Mr. Culp said.
One of GE's main clients in its production of jet engines is Boeing. Boeing's best selling plane has been grounded amid two fatal crashes involving the jet that killed over 300 people. Regardless of the drag on sales from the grounding of the 737 MAX, profits and revenues in GE's aviation increased. The division generated $1.72 billion in Q3 profits.
GE reported a massive loss of $9.47 billion due to restructuring costs, but reported a profit in many sectors and expects large cash flows the rest of the year.