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Shares of GE, which employs thousands of workers in China and
had been seen as heavily exposed to the economic weakness caused
by the virus, were up 2% at $11.10 in premarket trading.
Chief Executive Officer Larry Culp, who is restructuring GE
after a series of failures, in January forecast its
first-quarter free cash flow at a negative $2 billion, largely
due to the grounding of Boeing Co's <BA.N> 737 MAX for which it
makes engines.
At that point the company said it would recover to generate
between $2 billion to $4 billion in positive cashflow this year,
and an adjusted profit of 50 cents to 60 cents per share.
Analysts have estimated this year's cashflow at a positive $2.77
billion.
The U.S. industrial conglomerate also expects a hit of $200
million to $300 million to its first-quarter operating profit
from the virus, which has crushed economic activity in China and
disrupted global supply chains.
"It's a very conservative outlook and accommodates a lot of
headwinds... basically it sails through everything,” William
Blair analyst Nicholas Heymann said.
The U.S. Federal Reserve on Tuesday delivered a surprise early
half-point cut in interest rates in a bid to shield the world's
largest economy from the impact of the coronavirus.
GE shares have lost about 16% since the company's fourth-quarter
earnings report in January.
(Reporting by Rachit Vats in Bengaluru; Editing by Anil D'Silva
and Patrick Graham)
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