GE shares tumble after Larry Culp warns of negative cash flow in 2019
New York — General Electric's CEO Larry Culp surprised investors on Tuesday by forecasting a net cash outflow from the conglomerate's industrial business in 2019, a far more negative outlook than he offered previously, sending shares and bonds down.
"We lost $2.7bn last year in free cash in power," Culp added later in the interview, referring to expectations that GE's power business would take years to turn around."I don't want to sugarcoat that in any way, shape or form." GE's bonds also declined, with GE Capital bonds the hardest hit. A $2.25bn issue at 4.5% coming due in March 2044 was down 1.65%.
Culp's comments on Tuesday went beyond his warning in January that investors could expect industrial free cash flow to weaken in 2019, and the cash flow would increase"substantially" in 2020 and 2021.
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