Shares of General Electric Co (NYSE: GE) are down more than 10% on Tuesday after the industrial conglomerate said its free cash flow in Q1 missed Street estimates. Its future guidance was also a bit dovish.
What General Electric Q1 earnings report tells us
Net loss of 99 cents narrowed significantly from last year’s $2.61.
Adjusted for one-time items, adjusted EPS came in at 24 cents.
Revenue slid marginally (0.2%) to $17.04 billion in fiscal Q1.
FactSet consensus was for 13 cents of adjusted EPS on $16.85 billion in revenue.
At negative $880 million, FCF was below $816.5 million expected.
Aviation, renewable energy, and power, missed revenue forecasts for Q1, while healthcare topped estimates, as per the earnings press release.
General Electric confirmed its full-year guidance for $2.80 to $3.50 of per-share earnings on FCF between $5.50 billion and $6.50 billion, but warned it was likely to hit the lower-end of its guidance only, due to inflation and other pressures.
Highlights from CEO Larry Culp’s interview on CNBC
On CNBC’s “Squawk on the Street”, CEO Larry Culp said:
We knew it would be a slow start to the year but we’re encouraged by order up 13%, very strong demand. Then from our margin and cash perspective, we’re pleased with a margin expansion of 110 bps. Our FCF was up $1.70 billion YoY.
The stock is now down 20% from its high in mid-January. Late last year, General Electric announced plans of splitting into three separate public companies. CEO Culp agreed supply constraints and the Ukraine war continued to be a headwind but said:
A combination of strong underlying demand and how we’re improving the way we run our business despite inflation and what’s happening in Ukraine, I think we’re on our way, I really do.
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