General Electric Is Back on Track Now
There are two key takeaways from General Electric's (NYSE: GE) latest earnings report. First, its industrial free cash flow (FCF) generation is going to be better in 2020 than most watchers had feared. Second, there are real signs of operational improvements at the company. Both points are critical to the long-term investment case for the stock.
The company's FCF of $514 million in the third quarter was pretty good in the context of a 39% drop in revenue from its key aviation segment. As a reminder, GE is heavily reliant on GE Aviation for FCF. Indeed, the segment generated $4.4 billion in FCF in 2019, compared to $2.5 billion from GE Healthcare, and outflows of $1 billion and $1.5 billion from GE Renewable Energy and GE Power, respectively.
General Electric is improving its free cash flow. Image source: Getty Images.
Source Fool.com
