(Reuters) - General Electric Co (GE.N) plans to slash 737 MAX engine deliveries to Boeing Co (BA.N) roughly in half this year but set higher cash target for 2020 as it reported quarterly profit and cash flow that beat analysts’ estimates on Wednesday.
The results marked a fourth consecutive quarter that GE beat its earnings and cash flow forecasts, reinforcing a view that Chief Executive Officer Larry Culp was making progress in rescuing the ailing maker of jet engines, power plants, medical imaging equipment and other industrial goods.
Shares surged 9% to $12.79 in premarket trading.
GE said it expects to earn between 50 cents and 60 cents a share in 2020, less than the 66-cent forecast, on average, by analysts. It expects industrial free cash flow of $2 billion to $4 billion in 2020, bracketing the $3 billion analysts expect and up from its 2019 target of $0 to $2 billion.
Culp said on a conference call that GE will slow production of its LEAP 1-B engine for the 737 MAX, but will keep its line running to protect suppliers and prepare for increasing engine output in the second half of the year.
Boeing plans on the jet going back in service at airlines in the second half of 2020, and GE’s forecasts rest on that timing, Culp said. GE plans a deeper outlook discussion for March 4.
Meanwhile, GE is trying to tackle its problems by increasing “operational rigor” and lean manufacturing, Culp stressed on the call, suggesting simple measures such as calling on customers and collecting bills will improve performance.
GE’s
