General Electric (GE) announced first-quarter results that exceeded Wall Street expectations. The stock rose as the weakness of the battered engine was partially offset by oil, gas and aerospace strength.
The troubled industrial conglomerate posted adjusted earnings per share of 14 cents on revenue of $ 27.3 billion. Compared with the expectation of 9 cents per share with a turnover of 27.11 billion US dollars, according to a consensus forecast by Bloomberg.
On a continuing basis, GE's earnings in the first quarter were 11 cents a share – more than triple the same period last year. This stock was enough to rip GE's stock because of market moves ahead of the IPO. In early trading, the company's stock traded around $ 10.74, an increase of more than one dollar.
GE reported adjusted negative free cash flows – a highly anticipated metric for Wall Street – of approximately $ 1.2 billion in the quarter. However, this figure decreased significantly from minus $ 1.76 billion a year ago.
The company's most closely watched segments include the capital, aerospace and healthcare sectors. However, GE is plagued by the underperformance of its power business, which GE expects to receive around $ 400 million this year.
In the first quarter, orders in the electricity business – as expected – dropped by 14%. and sales decline by 22%. However, profits in GE's Aerospace, Oil & Gas and Healthcare segments helped offset the weakening of energy supplies.
Aerospace revenue increased 12% year-on-year, while oil and gas increased 4% year-on-year. Revenue from renewables declined 3% compared to the first quarter of 2018, reflecting GE's ongoing power generation efforts.
UBS analysts recently stated that "the bottom is in sight for GE Power and the stock is valued as a $ 13 target.
In March, GE led lower expectations for earnings growth in 2019 as the company struggles to curb debt and restructure its strained electricity business. CEO Larry Culp said the segment – one of GE's most watched segments – will improve, but stay in the red.
In a statement, Culp reaffirmed March's guidance to the company and said he was "encouraged by the improvements we are making in GE. This is a quarter in a multi-year transformation and 2019 will be a new year for us.
GE stock traded on the New York Stock Exchange closed 1.7% at $ 9.73 on Monday.