GE stock shoots up after profit miss but big free cash flow beat and upbeat outlook – MarketWatch

Shares of General Electric Co.

shot up 4.8% in premarket trading Tuesday, after the diversified industrial conglomerate reported a fourth-quarter profit that missed expectations but revenue and free cash flow that beat forecasts. Net income increased to $2.44 billion, or $2.27 a share, from $538 million, or 6 cents a share, in the year-ago period. Excluding non-recurring items, adjusted earnings per share fell to 8 cents from 20 cents, to miss the FactSet consensus of 9 cents. Revenue fell 16% to $21.93 billion, above the FactSet consensus of $21.75 billion, as all four of its business segments topped expectations. Industrial free cash flow was $4.4 billion, compared with previous guidance of at least $2.5 billion. “The fourth quarter marked a strong free cash flow finish to a challenging year, reflecting the results of better operations as well as strong and improving orders in Power and Renewable Energy,” said Chief Executive Larry Culp. For 2021, GE expects adjusted EPS of 15 cents to 25 cents, below the current FactSet consensus of 37 cents, and FCF of $2.5 billion to $4.5 billion, while BofA Securities analyst Andrew Obin was anticipating FCF guidance of about $1.5 billion to $3.5 billion. The stock has run up 48.9% over the past three months, while the S&P 500

has gained 13.4%.