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July 27, 2021, 6:41 a.m. EDT

GE stock surges after profit and revenue beats, a surprise swing to positive free cash flow

Shares of General Electric Co. (NYS:GE) shot up 4.0% in premarket trading Tuesday, after the industrial conglomerate reported second-quarter profit and revenue that beat expectations, and surprisingly generated positive free cash flow. On a net basis, the loss per shares narrowed to 14 cents from 26 cents, while excluding nonrecurring items, GE swung to adjusted earnings per share of 5 cents from a loss of 14 cents to beat the FactSet EPS consensus of 3 cents. Revenue rose 9% to $18.28 billion, above the FactSet consensus of $18.14 billion. Industrial free cash flow was about positive $400 million, compared with the FactSet consensus of negative $338.3 million, and the company raised the 2021 FCF guidance range to $3.5 billion to $5.0 billion from $2.5 billion to $4.5 billion. Among GE's business segments, revenue for Aviation rose 10% to $4.84 billion, but was below the FactSet consensus of $5.16 billion; Healthcare revenue grew 14% to $4.85 billion, well above expectations of $4.30 billion; Power revenue rose 3% to $4.30 billion to top versus expectations of $4.09 billion and Renewable Energy revenue jumped 16% to $4.05 billion to exceed expectations of $3.87 billion. "Momentum is building across our businesses, driven by Healthcare and services overall, with Aviation showing early signs of recovery," said Chief Executive Lawrence Culp. GE's stock has run up 19.6% year to date through Monday, while the SPDR Industrial Select Sector ETF (PSE:XLI) has gained 17.0% and the S&P 500 (S&P:SPX) has advanced 17.7%.

Link to MarketWatch's Slice.