Why GE's Long-Term Future Still Looks Bright
The fact that GE Power was the star segment in General Electric's (NYSE: GE) second quarter is meaningful. It speaks volumes for CEO Larry Culp's impact on the company since Oct. 2018. The segment's performance was the high spot in a quarter that contained a lot of good news and some blemishes that need to be monitored. Still, GE remains on the right track. Here's the lowdown.
By now, most investors, and certainly GE's management, know that the market keys off of GE's free cash flow (FCF) performance. The good news is investors got what they wanted. FCF came in at $383 million in the quarter, when management's last public statements had suggested there would be a $400 million outflow.
The better-than-expected performance led management to increase its full-year industrial FCF guidance to a range of $3.5 billion to $5 billion, compared to previous guidance for between $2.5 billion and $4.5 billion. It represents an increase of $750 million at the midpoint, which tallies with the FCF "beat" in the second quarter.
Source Fool.com
