GE boss gloomy predictions spook investors
At an industry conference, Larry Culp said that industrial free cash flow will be in negative territory, compared with a positive $4.5 billion last year as the company struggles to get out of one of the deepest slumps in its 127-year history. Since taking office in October Culp cut costs, agreed to sell GE’s bio-pharmaceutical business to Danaher Corp for $21.4 billion, and announced a restructuring of the power-equipment unit.
General Electric Co.’s CEO predicts a net cash outflow from its industrial businesses this year, shares tumble by 4.7%.
Stocks impacted: General Electric Co. (GE)
Despite the measures being taken, the company continues to face problems, with cash outflow expectations add to the bleak picture. By the way, cash flow is an important element in credit rating outlook. Therefore, the outflow prospects raise the risk of further debt downgrades. Last year, the stocks saw the worst slump since the early 1970s. Since the start of 2019, shares rallied 43% (through Monday). Yesterday, the prices fell below $10 as the shares suffered the biggest intraday percentage drop in more than three months, while the market value declined more than $4 billion.
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