GE's Stock Gains After Profit And Sales Beat Expectations

Chairman and CEO Jeff Immelt said the company expected to generate more cash flow through the remainder of the year, but acknowledged underlying market pressures.

Shares of GE were up more than 1 percent in premarket immediately after the announcement, then fell slightly to trade little changed.

On the company's and analysts' preferred basis of comparison, industrial operating and verticals earnings fell 48%, from $4.68 billion in the second quarter of 2016 to $2.42 billion and adjusted EPS fell 45%, to $0.28. He acquired power assets from France's Alstom, merged GE's oil and gas business with Baker Hughes, and moved the headquarters to Boston.

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The outlook marks a disappointing end to Immelt's tumultuous 16-year tenure as chief executive officer, during which GE trailed the broader stock market.

The challenges of navigating those markets will fall to John Flannery, a GE veteran whose most recent job was to run the health-care unit, after he takes over from Immelt on August 1. "People want to get the answers sooner" to Flannery's review. Flannery will focus on "reframing our look at 2018 and beyond", he said on the call.

"We've reduced our Industrial structural costs year to date by $670 million and we are on track to meet or exceed our $1 billion cost reduction target for the year", Immelt said. "We expect cash flow to continue to improve throughout the year".

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Results: GE earned 28 cents a share on revenue of $29.558 billion.

Estimates: Earnings per share to decline 51% to 25 cents as revenue drops 13.1% to $29.12 billion, according to Zacks Investment Research.

GE's closely watched cash flow from operations fell 67 percent to $3.6 billion from a year ago, reflecting the loss of contributions from the appliances division that the company sold.

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The second-quarter results beat analyst expectations on revenue and earnings, but Wall Street is also looking for deeper signs of prosperity at the company to help turn around the negative sentiment.


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