Aerospace & Defense

General Electric reaffirms 2021 free cash flow outlook

2 minute read

The logo of U.S. conglomerate General Electric is pictured at the site of the company's energy branch in Belfort, France, February 5, 2019. REUTERS/Vincent Kessler

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CHICAGO, March 10 (Reuters) - General Electric Co (GE.N) on Wednesday reiterated its 2021 forecast and announced a deal to sell its aircraft-leasing business to Ireland's AerCap Holdings NV (AER.N) as part of efforts to pare its debt.

The Boston-based company said it expects to generate $2.5 billion to $4.5 billion in free cash flow this year, with an adjusted earnings of $0.15 to $0.25 per share, reaffirming the guidance it provided in January.

All industrial businesses except non-gas power are projected to book higher cash flow in 2021.

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Free-cash flow is closely watched by investors as a sign of the health of GE's operations and ability to pay down debt.

"We are on a positive trajectory in 2021 as momentum builds across our businesses and we transform to a more focused, simpler, and stronger industrial company," said Chief Executive Larry Culp.

GE shares are up 31% this year, compared with a 3% advance for the benchmark S&P 500, and have gained about 160% since their May low. They were up 2.3% at $14.32 in pre-market trade.

The gains are being driven by hopes that the worst is over for the company as a recovery in air travel would boost its aviation business, usually its most profitable and most cash-generative segment.

GE said the deal for the aircraft-leasing business, known as GE Capital Aviation Services, or GECAS, is expected to help reduce debt by $30 billion. read more

It also announced a reverse stock split at a ratio of 1-for-8.

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Reporting by Rajesh Kumar Singh; editing by John Stonestreet and Louise Heavens

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