NEW YORK: General Electric Co raised its 2019 forecast, but disclosed more than $1 billion in potential costs from Boeing’s grounded 737 MAX jetliner. Boston-based GE, which makes 737 MAX engines in a joint venture, also said Chief Financial Officer Jamie Miller, who was appointed in October 2017, plans to step down after a successor is hired. The company which also makes power plants and medical devices did not specify a time frame.
GE appeared to cheer investors by saying it might generate as much as $1 billion in free cash flow this year, compared with a potential outflow of $2 billion that it forecast in May. GE also raised its profit outlook by 5 cents a share.
“There should be some relief from the raised EPS and free cash flow” forecast, Barclays analyst Julian Mitchell said. But GE’s portfolio of low-margin industrial businesses remains a concern. GE posted red ink again after two profitable quarters, due mainly to a $744 million goodwill charge for its power grid business. GE spent less on restructuring than analysts expected, which underpinned its performance. — Reuters
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