General Electric delivered fourth-quarter earnings on Wednesday that topped analyst expectations and gave a better than anticipated cash flow forecast that signaled the troubled conglomerate could be turning around.
Shares of GE rose as much as 6.8% in premarket trading from its previous close of $11.73. If that move higher holds through the open, it would bring GE’s stock to its highest level in nearly two years.
“The fourth quarter marked a strong close to the year for GE. We met or exceeded our full-year financial targets and are on a positive trajectory for 2020,” GE Chairman and CEO Larry Culp said in a statement.
Here’s what GE reported versus what Wall Street expected:
- EPS: 21 cents vs. 18 cents expected according to analysts surveyed by Refnitiv.
- Revenue: $26.24 billion vs. $25.57 billion expected according to analysts surveyed by Refnitiv.
GE’s closely-watched metric of industrial free cash flow (FCF) came in at $2.3 billion for 2019, topping its own guidance of between $0 to $2 billion. Free cash flow is a financial measure that’s often used as a gauge of efficiency.
GE’s 2020 outlook
While the company’s quarterly results better than anticipated, GE’s 2020 earnings forecast came in below what analysts surveyed by FactSet expected. GE said it expects to see earnings between 50 cents a share and 60 cents a share next year, below the 67 cents a share analysts were looking for from the industrial conglomerate.
GE’s forecast for industrial free cash flow next year was also higher than expected. GE expects industrial FCF will come between $2 billion and $4 billion in 2020 – notably above the $1.2 billion expected by analysts.