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GE Completes Gas Turbine Project, Provides Cash Flow View

General Electric Company GE announced that it completed the gas turbine modernization project at Tirreno Power’s Torrevaldaliga Sud Power Plant based in Rome, Italy. The completion of the gas turbine upgrade project will likely boost the performance and reliability of the 1,200-megawatt power plant in producing electricity.

Notably, the modernization project involved General Electric to work on installing a new rotor and enhancing a compressor system on a GE 9F.03 gas turbine to boost the durability and efficiency of the gas turbine. As noted, the project will help Tirreno Power to lower the normal degradation impact on the rotor components, thus boosting the lifespan. Notably, this will help in minimizing the unplanned downtime risk of the power plant.

It is worth mentioning here that experts from both companies implemented several safety measures, including the use of personal protective equipment, disinfection measures and physical distancing to safeguard workers’ safety from the coronavirus outbreak. In addition, General Electric formed a joint GE - FieldCore COVID-19 taskforce for monitoring and responding to the developing situations and ensuring compliance with local and national regulations.

Apart from this, General Electric’s chief executive officer, Larry Culp, communicated that the company might generate a negative free cash flow in 2020. As also noted, the company’s free cash outflow is likely to be $3.5-$4.5 billion in the second quarter of 2020. The weak cash flow outlook mainly stems from the softness in its aviation business unit on account of the coronavirus outbreak.

Notably, the company anticipates the installation of its commercial jet engines to decline approximately 45% in the second quarter, with aircraft spare sales expected to fall about 60%. However, the demand for its healthcare products has grown amid the coronavirus pandemic, with orders likely to increase over 100% in the second quarter.

General Electric's share price decreased 7% yesterday, eventually closing the trading session at $6.78.

Zacks Rank, Price Performance and Estimate Trend

The company, with a $59.3-billion market capitalization, currently carries a Zacks Rank #3 (Hold).

Over the past six months, its share price has decreased 39.2% compared with the industry’s decline of 12.9%.

 


In the past 30 days, the Zacks Consensus Estimate for the company’s earnings has declined 88.2% to 4 cents for 2020.

Stocks to Consider

Some better-ranked stocks are Activision Blizzard, Inc. ATVI, Broadwind Energy, Inc. BWEN and Graphic Packaging Holding Company GPK. While Activision Blizzard currently sports a Zacks Rank #1 (Strong Buy), Broadwind Energy and Graphic Packaging carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Activision Blizzard delivered a positive earnings surprise of 31.34%, on average, in the trailing four quarters.

Broadwind Energy delivered a positive earnings surprise of 50.00%, on average, in the trailing four quarters.

Graphic Packaging delivered a positive earnings surprise of 9.59%, on average, in the trailing four quarters.

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