Apr 27 (Reuters) – General Electric saw a much lower-than-expected cash outflow in the first quarter, even as its lucrative motor business grapples with the pandemic-sparked air travel collapse, a factor that reduced the company’s income.
The company also reaffirmed its full-year free cash flow and earnings per share outlook.
The US industrial conglomerate reported a cash outflow of $ 845 million compared to an outflow of $ 2.2 billion last year. Analysts surveyed by Refinitiv expected, on average, a cash outflow of 1.3 billion.
The first quarter tends to be GE’s slowest period of the year. However, better profits in all of its industrial businesses except aviation and better working capital helped curb cash spending.
Investors closely watch free cash flow as a sign of the health of GE’s operations and its ability to repay debt.
Its jet engine business, usually a source of income, is still reeling from the downturn in global air travel. The unit generated revenue of $ 4.990 million during the quarter, down 28% from a year ago and below analysts’ estimate of $ 5.31 billion, according to IBES data from Refinitiv.
GE shares, which have gained more than 145% since last May, fell 2.36% to $ 13.25 in pre-market trading.
On an adjusted basis, GE earned 3 cents a share in the quarter, compared to 2 cents a share a year earlier. Revenues fell 12% to $ 17.12 billion.
(Reporting by Rajesh Kumar Singh in Chicago and Ankit Ajmera in Bengaluru; edited in Spanish by Gabriela Donoso)