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INX:GE, Mar 26, 11:28 UTC

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Saturday, March 23


News

The Most Important Takeaway From GE's Latest Presentation

GE

After keeping its collective head down for months, General Electric's (NYSE: GE) management team has started to put itself out there, offering numerous conference calls, presentations, and Q&A sessions to promote its plans for the company. In this, her first presentation during Culp's tenure, Miller largely repeated the same talking points Culp had used. But there was one important point that many investors might have missed that doesn't bode well for the company. Culp used the term "reset" in his presentation, and many news outlets picked up on it, dubbing 2019 a "'reset' year" for the company. That's longer than many investors may want to wait. For example, while Miller stated that Q1 2019 is expected to be the company's weakest quarter of the year -- implying subsequent improvement -- the company is still almost certain to be cash flow negative for 2019 and is only projecting "positive cash flow" (which could be $1) in 2020. When discussing the company's deleveraging efforts, Miller pointed out that the company has "$25 billion of debt maturing in 2019 and 2020," after which (i.e., in 2021) the company will be in a much better situation.

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Thursday, March 21


News

There Is a Bullish Case for General Electric Stock

GE

InvestorPlaceMarch 21, 2019, 3:11 PM GMT. For the owners of General Electric (NYSE:GE) stock, the news that the company released recently was both very disappointing and very uplifting. Those don’t sound like the words of a CEO who’s unsure about his company’s ability to survive. Assuming that Culp, who has a great reputation, isn’t a con artist, I think he’d sound very different if he thought GE and GE stock might go belly up. That came in at 50 cents-60 cents per share of GE stock, versus analysts’ consensus estimate of 65 cents. However, Culp said that the company’s EPS performance would improve after Q1. Culp sounded optimistic about the company’s ability to survive and to thrive by 2021. And it sounds like he has a viable plan to turn the company around. Although his near-term forecast was disappointing to me and to many owners of GE stock, the company’s long-term outlook and drivers appear to be intact. Therefore, long-term investors should continue to buy General Electric stock at current levels. As of this writing, Larry Ramer did not own shares of any of the companies mentioned.

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News

Will Boeing's Problems Spell Trouble for GE Aviation?

GE BA

General Electric manufactures all of the engines for Boeing 737 MAX jets. The Boeing 737 MAX line has outsized importance to GE Aviation for two reasons. It's too early to worry about the potential impact on GE Aviation from lost 737 MAX sales, but let's assume the absolute worst possible scenario: Tests turn up a flaw in the planes that can't be fixed without fundamentally altering the design, the plane needs to be reengineered from the ground up, and all 737 MAX orders are immediately canceled (for the record, this scenario is incredibly unlikely). How would GE Aviation be impacted? In fact, Kenya Airways has already stated it may look at the Airbus A320 neo, while other airlines have openly pondered switching to wide-body Boeing jets. However, switching to an A320 neo could cause unacceptable delays for buyers that chose to go that route, because Airbus has a huge backlog of the planes, and no delivery slots are available for at least a few years. Even though CFM isn't the exclusive supplier of A320 neo jet engines, it's the primary supplier thanks to problems in rival Pratt & Whitney's geared turbofan engine in 2017 and early 2018. As of mid-2018, CFM supplied 58% of A320 neo engines.

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Wednesday, March 20


News

LEAD PLAINTIFF DEADLINE ALERT: Faruqi & Faruqi, LLP Encourages Investors Who Suffered Losses Exceeding $100,000 In General Electric Company To Contact The Firm

GE

The case, Sheet Metal Workers Local 17 Trust Funds v. General Electric Company et al., No. The lawsuit focuses on whether the Company and its executives violated federal securities laws by making false and/or misleading statements and/or failing to disclose that: (1) the design and technology of GE Power’s flagship gas turbines were structurally flawed as they were plagued with an oxidation problem that caused the blades in the H-Class gas turbines to fail; (2) GE Power’s goodwill was materially overstated, in large part because of such structural issues; (3) the Company lacked adequate internal and financial controls; and (4) as a result of the foregoing, Defendant’s public statements were materially false and/or misleading and/or lacked a reasonable basis. Specifically, on September 19, 2018, Richard Stokes, who was President and Chief Executive Officer of the GE Power portfolio at the time, published an article on LinkedIn disclosing that the Company had identified an issue they expected to impact their High Efficiency, Air Cooled (“HA”) units and which involved an oxidation issue that affected the lifespan of a single blade component. Your ability to share in any recovery is not affected by the decision to serve as a lead plaintiff or not.

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News

This Rally in General Electric Stock Isn’t Totally Irrational

GE

Everywhere you turn, the fundamental prospects for General Electric (NYSE:GE) remains shrouded in doubt. As new CEO Larry Culp highlighted recently, the embattled organization is currently embarking on a “reset” year. By 2020, investors should see substantive improvements, which naturally bolster the case for General Electric stock. The bad news, though, is that the GE stock price has only received a negative impact. Since Culp’s hiring, shares are down 12%, inclusive of this year’s incredible rally. As many analysts, including our own James Brumley pointed out, Culp is an outsider. Formerly head of Danaher (NYSE:DHR), Culp is refreshingly a straight-shooter regarding GE’s problems. However, his idea involves a rather predictable and unimaginative tactic: divest like there’s no tomorrow. Certainly, getting rid of underperforming assets, particularly when you’re neck-deep in debt, offers tremendous value. But it also sacrifices future revenue streams, which General Electric stock can’t afford. Therefore, Culp can’t “talk up” shares with mere straight-talk.

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Tuesday, March 19


News

General Electric Company: Doc re. GE Files DEF 14A

GE

On March 18, 2019, General Electric Company (the "Company") filed a DEF 14A (Proxy Statement) with the U.S. Securities and Exchange Commission ("SEC"), which has been submitted to the U.K. National Storage Mechanism and will be available shortly for inspection at http://www.morningstar.co.uk/uk/NSM. It is also available on the SEC's website at http://www.sec.gov and on the Company's website at https://www.ge.com/investor-relations/events-reports. This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom.

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News

General Electric Finally Gives Guidance: What You Need to Know

GE

The numbers and details discussed aren't likely to be significant game changers, but they'll change the way the bull/bear debate over the stock takes place. Going into the presentation, it was already assumed that industrial free cash flow (FCF) would be negative in 2019 and the troubled power segment's cash outflow would get worse in 2019 before both sets of numbers registered improvement in 2020. Cash flow guidance. For a flavor of what to expect, here's the industrial FCF guidance given for GE's major segments in the next few years. Aviation revenue is set to grow by high-single digits in 2019, but a decline in the margin -- from 21.2% in 2018 to around 20% in 2019 -- will restrain earnings growth and lead to flat FCF performance. However, this shouldn't be seen as a negative because the margin deterioration is largely down to the ramp in LEAP production -- something that will lead to strong earnings and cash flow in future years as the engines are serviced.

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Saturday, March 16


News

Thinking of Buying General Electric Company Stock? Here's What You Need to Know

GE

General Electric Company(NYSE: GE) has an incredible history behind it, and it remains a large and important industrial company. But it is not the same company that it was thirty years ago. In fact, since the deep 2007-to-2009 recession, GE has been a company struggling to find its way. While it is highly likely to survive and thrive again, offering material upside potential, investors need to understand what they are buying when they invest in GE today. All of those declines suggest that GE has material recovery potential, noting that its core industrial businesses remain large and globally important in their specific niches. Although it is still unclear what businesses GE will retain over the long term, some of its divisions are actually doing reasonably well. The most notable is the aviation group, which saw year over year segment profits rise 20% in 2018. And while healthcare revenues and profits were only up 4% and 6%, respectively, this is a substantial business in an important growth industry -- with robust 18% profit margins. If GE can turn around some of its more troubled units, notably its power division, investors would likely, and perhaps justifiably, reward it with a higher share price. However, you can't lose sight of the big picture here.

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GE Cash Flow Will Bottom Out in 2019

GE

Earlier this month, Culp shocked investors when he stated at an investor conference that free cash flow would probably turn negative in 2019. On Thursday, GE provided more detail on its outlook for 2019 and beyond. Fortunately, the company's 2019 cash flow forecast is not as bad as some had feared, and GE expects strong improvement over the next two years. GE also expects cash flow at the power business -- which burned $2.7 billion of cash last year -- to fall deeper into negative territory in 2019. Aside from restructuring spending, the big cash flow headwinds here are cost overruns on projects that were approved with overly aggressive assumptions and legacy costs that are mainly related to acquiring Alstom's power business. In fact, GE believes that its power and renewables segments will both produce positive free cash flow in 2021. For comparison, they are on track to burn $4 billion or more on a combined basis this year. Asset sales will negatively impact cash flow over the next two years, but lower interest expense and organic growth in GE's healthcare and aviation segments should more than offset that headwind.

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Friday, March 15


News

Is General Electric ridiculously overvalued?

GE

It doesn’t take an investing whiz to come to the assumption that in all likelihood, General Electric (GE) is being grossly overvalued by the market given its current financial state and what could happen with profits this year. GE shares presently trade on a price-to-earnings multiple of 16.6 times the high-end of management’s $0.50 to $0.60 a share profit estimate revealed on Thursday. “Can GE stabilize its operations, sure. But is the company a growth company, come on,” long-time GE analyst John Inch now at Gordon Haskett told Yahoo Finance when chatting about GE’s valuation. That has the effect of blowing up GE’s price-to-earnings multiple today even as earnings currently are depressed. What GE put forth in an extensive 38-page presentation Thursday only fed the excitement of investors.

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