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GE first-quarter profit rises, warns on 737 MAX

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GE first-quarter profit rises, warns on 737 MAX
FILE PHOTO: The logo of U.S. conglomerate General Electric is pictured at the company's site of its energy branch in Belfort, France, February 5, 2019. REUTERS/Vincent Kessler/File Photo   -   Copyright  Vincent Kessler(Reuters)
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By Rachit Vats and Alwyn Scott

(Reuters) – General Electric Co said on Tuesday first-quarter profit from its continuing operations more than tripled, helped by higher sales in its aviation, oil and gas, and healthcare units.

Shares surged more than 6 percent in premarket trading.

The company stuck to its full-year forecast for earnings, but said problems with Boeing Co’s 737 MAX jet presented a “new risk” for GE, which makes engines for the plane with partner Safran SA of France. Boeing’s newest jetliner was grounded worldwide last month after a second fatal accident in less than five months.

GE reported $1.2 billion (£923.8 million) in negative cash flow from its industrial business, much better than the $2.16 billion outflow that analysts, on average, were expecting.

Chief Executive Officer Larry Culp had set low earnings targets in March and warned that GE’s industrial cash flow could be negative by as much as $2 billion.

Culp had said this “reset” would result in negative cash flow at its ailing power business through 2020 before turning positive in 2021. GE wrote down $22 billion in goodwill at the unit last year.

In the latest quarter, power orders fell 14 percent and profit fell 71 percent to $80 million on revenue of $5.7 billion, down about 22 percent from a year earlier, GE said.

Earnings from continuing operations attributable to GE shareholders rose to $954 million in the first quarter ended March 31 from $261 million a year earlier.

Earnings per share from continuing operations rose to 11 cents from 3 cents, the company said.

On an adjusted basis, GE earned 14 cents per share. Analysts had expected 9 cents per share, on average.

Total revenue fell 2 percent to $27.29 billion, above analysts’ average estimate of $27.05 billion.

(Reporting by Rachit Vats in Bengaluru and Alwyn Scott in New York; Editing by Anil D’Silva and Bill Rigby)

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