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GE’s shares are up after a larger-than-expected loss, but sales and FCF exceeded forecasts

Shares of General Electric Co. GE,
+ 2.68%
rose 2.0% in premarket trading on Wednesday after the diversified industrial conglomerate reported a greater than expected loss in the second quarter, but revenues and free cash flow exceeded projections. The net loss increased to $ 2.18 billion, or 26 cents per share, from $ 61 million, or 1 cent per share, in the prior year period. Total revenue decreased 24% to $ 17.75 billion, but exceeded FactSet’s consensus of $ 17.01 billion. Industrial free cash flow was $ 2.1 billion negative, compared to the FactSet consensus of $ 3.39 billion negative, and GE’s forecast at the end of May was $ 3.5 billion to $ 4.5 billion. Among GE’s business segments, Power revenues were down 11% to $ 4.16 billion, above the FactSet consensus of $ 3.84 billion; Renewable energy revenues decreased 3% to $ 3.51 billion to exceed expectations of $ 3.44 billion; Aviation revenues declined 44% to $ 4.38 billion, below expectations of $ 4.62 billion; and Healthcare sales declined 21% to $ 3.89 billion, to the highest expectations of $ 3.82 billion. “We are working through a still difficult COVID-19 environment, and while it is too early to predict the commercial aviation recovery path, we continue to plan for a long-term return to previous levels of activity,” said CEO Larry Culp. GE shares have fallen 38.3% through Tuesday, while the Dow Jones Industrial Average DJIA,
lost 7.6%.