GE falls after JP Morgan's Tusa brings back focus on free cash flow
(Reuters) - Shares of General Electric Co fell 3 percent on Tuesday after a top-rated JP Morgan analyst raised concerns about the company's divestiture plans and its impact on free cash flow. Analyst Stephen Tusa, who has held a negative outlook on the stock, had in December upgraded the stock to 'neutral', saying the challenges the conglomerate faces are better understood.
(Reuters) - Shares of General Electric Co fell 3 percent on Tuesday after a top-rated JP Morgan analyst raised concerns about the company's divestiture plans and its impact on free cash flow.
Analyst Stephen Tusa, who has held a negative outlook on the stock, had in December upgraded the stock to "neutral", saying the challenges the conglomerate faces are better understood.
The stock rose 11 percent after Tusa ditched his long-held negative view.
In a note on Tuesday, Tusa said GE's fourth-quarter results, scheduled for Thursday, would be of less significance compared to its commentary on ailing businesses like insurance and capital services.
"We believe the focus in 4Q should turn back to these fundamentals, where we continue to point to the mechanical headwinds from dilutive asset sales, a key aspect as to why FCF (free cash flow) remains so weak," Tusa said in the client note.
In its third-quarter results, GE said it will significantly miss its full-year cash flow target of about $6 billion. Analysts now expect the company's free cash flow to be $2.69 billion, according to Refinitiv data.
GE posted a loss of $22.8 billion for the quarter, as it cut its dividend and said it faced a deepening federal accounting probe.
(Reporting by Rachit Vats in Bengaluru)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.