GE: first-quarter hit by aviation woes
(CercleFinance.com) - GE said that the impact from COVID-19 has "materially challenged" its first-quarter results, especially in aviation, where the US industrial conglomerate saw a sharp drop in commercial aerospace as the virus spread in March.
GE, whose operations range from engineering to software and analytics, said first-quarter net income rose to 6.2 billion dollars, or 72 cents per share, from 3.6 billion, or 10 cents a share, a year ago.
Profit from continuing operations came to 6.4 billion dollars, from just 983 million dollars in the first three months of 2019.
But revenue fell 8% to 20.5 billion dollars, while total orders dropped by 5% to 19.5 billion dollars. In aviation, revenues decreased by 13%, with equipment down 21%.
In all, COVID-19 factors have reduced quarterly cash flow by approximately 1 billion dollars, GE said.
The company - which recently withdrew its guidance for 2020 - is targeting operational cost reductions of over 2 billion dollars and 3 billion dollars of cash preservation to mitigate the financial impact of the pandemic.
The conglomerate said that it has also started to execute a series of actions to de-risk and de-lever its balance sheet in this "challenging" environment.
Its shares were down almost 6% in pre-market trading.
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