GE Bulls Finally Have More Than Hope on Their Side
And that’s a nice change.
Now, GE just needs to keep the momentum going.
Photographer: Goh Seng Chong/Bloomberg
General Electric Co.’s shares have traded more on hope than hard math over the past year, but it looks like CEO Larry Culp’s turnaround efforts are starting to yield real results.
Free cash flow is the key number to watch when the company reports earnings, and GE said Wednesday that it generated $2.3 billion from its industrial businesses over the course of 2019. That exceeded the high end of GE’s guidance range, which was updated twice over the course of the year from an initial call in March for free cash flow to be at best zero. Was Culp sandbagging expectations, or setting a low bar to start with and artfully managing to a positive surprise? 1 It’s a fine line, but either way, the strategy worked. GE shares climbed more than 50% in 2019 and shareholders were still wowed enough by Wednesday’s results to send the stock up an additional 10%.