General Electric posts an 8% lower revenue in Q1 due to Coronavirus restrictions

In its statement on Wednesday, General Electric (NYSE: GE) cited Coronavirus pandemic as it announced its revenue to have dropped significantly in the first quarter.

At £16.50 billion, the company’s net quarterly revenue came in 8% lower as compared to the same quarter last year. GE made 4 pence of adjusted earnings per share in the recent quarter that fell short of the experts’ forecast of 6.44 pence per share. The company also highlighted its cash flow to have booked an £800 million hit in Q1.

GE’s aviation and power and renewable energy businesses remain under pressure

Owing to COVID-19 that brought demand for air travel to a near halt, GE’s aviation segment posted a 13% year over year (YoY) decline in revenue to £5.54 billion in the first quarter. Profit from the aforementioned division printed at £810 million that marked a 39% decline as compared to the year-ago figure. GE’s power and renewable energy segment also took a revenue hit in Q1.

The company’s healthcare business, on the other hand, was noted upbeat with a 7% increase (YoY) in quarterly revenue to £4.26 billion. Profit from this unit climbed to £721 million from £628 million versus the comparable quarter last year. GE attributed its success in the healthcare business to a higher demand for its products that are being used in the diagnosis of COVID-19 and its treatment.

According to CEO Larry Culp, GE is planning on slashing expenditures by over £1.16 billion to cushion the economic blow from the health crisis. The company is also considering an additional £2.41 billion in cash preservation. The second quarter, Culp added, is expected to take a more pronounced financial hit due to the pandemic.

General Electric withdraws full-year financial guidance on COVID-19 uncertainty

Citing Coronavirus uncertainty, General Electric also withdrew its financial guidance for 2020. The company also boasted over £37.81 billion in cash and cash equivalents. GE also has a £12.07 billion revolving debt facility to survive the pandemic.

General Electric was reported 2.2% down in premarket trading on Wednesday. At £5.46 per share, the company is currently around 40% down year to date in the stock market. The COVID-19 driven downward rally has wiped almost all of the company’s gains that it recorded in 2019.

At the time of writing, General Electric has a market cap of £63.90 billion.