Mubasher: General Electric Co (GE) lost less than expected cash in the second quarter (Q2) of the year even as the coronavirus pandemic hurt demand in its aviation business, contributing to a wider-than-expected quarterly loss, Reuters reported on Wednesday.
Cash outflow of the Boston-based industrial conglomerate from industrial operations totalled $2.1 billion, slightly lower than a quarter ago and much below than its own estimates of between $3.5 billion and $4.5 billion for the quarter.
On an adjusted basis, GE reported a loss per share (LPS) of 15 cents, compared with a profit per share of 16 cents last year. Analysts on average, however, expected an LPS of 10 cents.
Revenue declined by 24% year-on-year (YoY) to $17.7 billion.
“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 statement said.
The unit reported a quarterly loss of $680 million, attributed to a 44% drop in revenues. Orders plummeted by 56% annually during the quarter.
The company expects free cash flow to improve in the second half (H2) of the year and turn positive in 2021 even though it seems a slow recovery in the aviation business.