General Electric Co lost less cash than estimated in the second quarter even as the coronavirus pandemic pummeled demand in its aviation business, resulting in a wider-than-expected quarterly loss.
The Boston-based industrial conglomerate reported cash outflow of $2.1 billion from industrial operations, a tad lower than a quarter ago and much below than its own estimate of between $3.5 billion and $4.5 billion for the quarter.
On an adjusted basis, GE reported a loss of 15 cents per share, compared with a profit of 16 cents a share last year. Analysts on average expected a loss of 10 cents per share, according to IBES data from Refinitiv.
Revenue declined 24% year-on-year to $17.7 billion.
Shares were up 1.6% at $7 in premarket trading.
Aviation is GE’s largest, most profitable and most cash- generative business segment. The pandemic, however, has brought global travel to a virtual halt, exacerbating the troubles for the unit that was already struggling with the grounding of Boeing’s 737 MAX planes, for which it makes engines.
The unit reported a quarterly loss of $680 million on the back of a 44% drop in revenues. Orders were down an annual 56% during the quarter.
While the company sees a slow recovery in the aviation business, it expects free cash flow to be better in the second half of the year and turn positive in 2021.
GE said it is launching a program to fully monetize its stake in Baker Hughes over about three years.
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