The logo of U.S. conglomerate General Electric is seen on the company building in Belfort, France, October 19, 2019. REUTERS/Vincent Kessler
(Reuters) – General Electric Co (GE.N) on Thursday warned 2020 free cash flow would be negative as it struggles with weakness in its aviation and power units due to the coronavirus outbreak, sending its shares 3% lower.
The company also expects second-quarter free cash outflow to be between $3.5 billion and $4.5 billion, wider than analysts’ average estimate of negative $2.5 billion, GE Chief Executive Officer Larry Culp told investors at the Bernstein Conference.
He added that the company expects commercial jet engine installs to fall about 45% in the second quarter, with sales of aircraft spares declining about 60%.
The COVID-19 pandemic has brought air travel to a virtual standstill, hitting GE’s aviation business at a time when its power business was struggling with sluggish demand.
The company has cut thousands of jobs in a bid to save cash and last month pulled its full-year forecast, citing the uncertainty caused by the pandemic.
The coronavirus crisis, however, has boosted sales of the company’s healthcare products, with second-quarter orders expected to rise more than 100%, Culp said.
Reporting by Ankit Ajmera and Rachit Vats in Bengaluru; Editing by Aditya Soni