FILE PHOTO: General Electric Co. Chief Executive Officer Larry Culp mingles with shareholders at the company’s annual meeting in Tarrytown, New York, U.S., May 8, 2019. REUTERS/Alwyn Scott
(Reuters) – General Electric Co Chief Executive Officer Larry Culp affirmed the ailing conglomerate’s weak forecasts for 2019 and beyond on Wednesday, a potential sign of stability after his predecessors repeatedly missed financial goals.
GE expects to lose as much as $2 billion in free cash flow this year, but sees the outflow ending in 2020 and an “acceleration” of cash flow improvement in 2021, Culp said at the annual Electrical Products Group conference in Florida. That’s in line with what he forecast in March and April.
Culp stressed the difficulties the company still faces in improving its financial results.
“I think we’re making progress but I don’t want anyone to walk out of here thinking this is something that is easily fixed,” Culp said. “There’s a lot to do here.”
GE shares were down 0.2% at $9.94 at midday.
Culp gave fresh detail about how he is reworking operations, ticking off several problems that struck him when he became CEO last October. GE had high ambition but lacked focus, he said, and it had lost sight of what customers wanted.
When Culp asked employees about quality, a top concern of customers, he said he was told about the cost of quality. GE is rooting out “intramural skirmishes” between equipment and services divisions, he said.
GE also is trying to manage billings and cash flow more closely to avoid “quarter-end and year-end sprints versus daily management,” he said.
Reporting by Alwyn Scott in New York; Editing by Jeffrey Benkoe and Phil Berlowitz