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.
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