General Electric Q1 earnings 2020

General Electric reported Wednesday a steep declines in first-quarter revenue and earnings as the industrial giant took a hit amid the coronavirus pandemic. 

The company posted a total revenue of $20.524 billion, which represents a year-over-year decline of 8{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f}. GE Industrial profits fell 46{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} year over year to $1.096 billion from $2.017 billion. On an adjusted per-share basis, the company earned 5 cents. That’s below a Refinitiv estimate of 8 cents per share. 

“The impact from COVID-19 materially challenged our first-quarter results, especially in Aviation, where we saw a dramatic decline in commercial aerospace as the virus spread globally in March,” CEO Larry Culp said in a statement. 

General Electric’s aviation business saw revenue fall by 13{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} to $6.892 billion on a year-over-year basis, with profit tumbling 39{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} to $1.005 billion from $1.66 billion. Orders also declined by 14{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f}.

GE shares have lost about 40{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} of their value this year as the coronavirus pandemic has brought global economic activity to a screeching halt. 

However, the company announced earlier this month its cash and cash-equivalent holdings topped more than $47 billion along with a revolving debt facility of $15 billion to ride out the virus-induced downturn.

But JPMorgan analyst Stephen Tusa thinks investors should still be cautious around the maligned industrial giant.

“We caution investors against interpreting these events as an ‘all clear’ as well as thinking GE is like any other stock we cover with regard to leverage to a recovery in the foreseeable future,” Tusa said in a note to clients. “With the guide for this year now pulled, the company has the ability to opt to not say much, but we think info from GE and others will be enough to set the anchor for a materially lower stock price.”

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