General Electric: withdrawal of financial targets

  •   14/04/2020 - 11h30
  •   DEHOUI Lionel

This Thursday, the General Electric (GE) group published information that leaves no one indifferent. You only have to be an economic market analyst to be attracted by GE's announcement. Its shareholders and investors will need to show understanding about the current difficult situation. Indeed, the group published on Thursday that it is withdrawing its financial forecasts because of the never stable statistics offered by the current health crisis atmosphere. Covid-19 continues to ruin lives and the economy as well. According to General Electric's press release, its shareholders should expect the collapse or drastic lowering of its adjusted EPS. Indeed, first-quarter EPS was estimated at more than 10 cents in previous reports released by the group. But in response to the pandemic, jobs will be cut and the short-time working scheme will have to be reinstated.

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General Electric: withdrawal of financial targets

Free cash flow and adjusted EPS

According to the GE conglomerate's estimates for the first quarter of fiscal year 2020, the company's industrial free cash flow is almost similar to what was previously announced. The announcements at the time were about $2 billion. On the other hand, General Electric has seen a gradual upward degradation of its total adjusted EPS. This is also observed in its industrial cash flow. The group gives the reasons.


The causes of the fall

According to General Electric, the main reasons for this decline in performance are naturally linked to non-cash and non-calendar items in the aeronautics and renewable energy sectors. However, through its press release, the General Electric group states that it is currently impossible at its level to give exact figures on the period and scale of activities at the takeover.

Note: The same applies to the pace of recovery in the various end markets, the chains used to source supplies and the day-to-day activities of its staff.


Some values

Things are different on the side of the Fast Retailing ready-to-wear group, which has not escaped the negative impacts of the Coronavirus. It had decided to proceed with a significant reduction in its targets. But his investors are more reassured than ever. The group finishes on a progress note estimated at 2.64% at 48,190 yens.

If the visibility has been profitable to Fast Retailing, it has plunged other groups who did not disclose forecasts. This is the situation of Seven & I Holdings, which lost 0.66% to 3,450 yen. This Thursday, the group known for retail sales should learn from this situation to do better soon.


The exchange rates

The price of a barrel of WTI crude oil had dropped 9.29% to $22.76 while North Sea Brent crude oil prices dropped 4.14% to $31.48. During the discussions between the oil-producing States, it was agreed that some will have to reduce their production by 10 million barrels each day. A fact which saddens the whole sector, but which proves to be essential, even if it is still insufficient for the moment. For the reserves are at the maximum point.