GE shares jump after company posts surprise adjusted third-quarter profit, revenue tops expectations

General Electric reported stronger than forecast revenues and a surprise adjusted profit on Wednesday for the third quarter.

The results for the company were weaker than for the same quarter a year ago, due in part to the coronavirus pandemic, but were better than Wall Street analysts expected. Shares of GE jumped more than 5% in premarket trading after the results were released.

Here’s how GE’s results compared with Wall Street expectations:

• Revenue: $19.42 billion vs $18.73 billion forecast by analysts surveyed by Refinitiv.
• Earnings per share: 6 cents adjusted vs a loss of 4 cents per share expected.

Revenue for the industrial company’s aviation unit fell 39% year over year but the decline was partially offset by slight gains for the renewable energy and power segments.

The company lost 13 cents a share for the quarter on a nonadjusted continuing basis and including certain impairment charges.

“We are managing through a still-difficult environment with better operational execution across our businesses, and we are on track with our cost and cash actions,” CEO Lawrence Culp said in a statement. “While our work continues, GE’s transformation is accelerating, and we expect Industrial free cash flow to be at least $2.5 billion in the fourth quarter and positive in 2021.”

Revenues declined 7% year over year for GE’s health-care segment. Orders were down for all applicable segments, ranging from a 12% decline for power to 54% for aviation.

GE Capital, the company’s financial arm, had a loss of $78 million during the quarter compared with a loss of $663 million during the third quarter of 2019, due primarily to the effects of a one-time pretax charge. The segment had $15 billion of liquidity at the end of the third quarter.

The company also reported $514 million in industrial free cash flow for the quarter, down from $650 million from a year earlier.

The pandemic hit the company’s aviation business hard during the spring, leading to furloughs and layoffs. GE’s second-quarter earnings, released in July, showed a wider-than-expected loss despite revenue topping estimates.

Shares of GE have lagged the broader market this year, shedding 36% year to date. That continues a long-term decline for the stock, which traded above $30 per share at the beginning of 2017 and currently trades above $7 per share.

Correction: GE’s earnings report was announced Wednesday.