General Electric said Wednesday it was making “steady progress” in its restructuring efforts as it raised its guidance for a key cash flow metric and announced the departure of CFO Jamie Miller.
For the second quarter, GE’s adjusted earnings fell 6% to 17 cents a share but beat analysts’ estimates of 12 cents per share. Revenue declined 1% to $28.83 billion, but that was ahead of estimates of $28.68 billion.
GE said it may generate as much as $1 billion in free cash flow from its industrial operations this year, compared with the potential outflow of $2 billion that it forecast in May.
“We made steady progress on our strategic priorities in the second quarter,” CEO Larry Culp said in a news release, citing “meaningful improvements” in the conglomerate’s struggling power division, which makes turbines for power plants.
But Miller, who has been CFO since October 2017, will be leaving her role. Culp told The Wall Street Journal that he “made the call” that now is the time for the CFO change, and he plans on speaking with “new friends and old” in considering candidates for the job.
“I greatly appreciate Jamie’s professionalism, expertise, and many contributions to GE’s significant transformation during this critical time,” he said in a news release. “She has been instrumental in developing our portfolio strategy, furthering our efforts to make GE a more focused industrial company, and spearheading our de-leveraging plan during a challenging period.”
In trading Wednesday, GE shares fell 1.6% to $10.70 after rallying more than 40% this year before the earnings release. “There should be some relief from the raised EPS and free cash flow” forecast, Barclays analyst Julian Mitchell said.
As Reuters reports, “Investors have watched GE’s cash generation as it has failed to keep pace with earnings in recent years, raising concerns that GE’s actual financial performance was falling short of stated results.”
In the second quarter, Culp said, GE’s industrial operations generated more cash than expected, in part because it has become more aggressive in billing customers, collecting payments and reducing inventory.