General Electric (NYSE:GE) jumped 4.5% in today's trade to its highest close in nearly a month after swinging to a Q1 profit and burning through $1.2B in cash - not great, but better than Wall Street’s worst fears of $2B-$4B.
The stock closed above its 200-day moving average for the first time since January 2017.
But "one quarter is a data point, not a trend," CEO Larry Culp cautioned during today's earnings conference call, noting the improved Q1 results largely stemmed from the timing of payments to suppliers and from customers.
Profit margins also contracted at GE's aviation, power and renewable energy businesses, the three core units the company plans to retain amid its coming break-up.
Q1's 1.6 percentage point drop in GE's industrial margins is a "stark reminder of the challenges" the company still faces, says Rene Lipsch, lead GE analyst at Moody’s, adding that he expects margins to be flat or slightly improved by year-end.
"While GE has a lot of work to do, we think today’s results indicate a positive step in the right direction," writes CFRA analyst Jim Corridore, who trimmed his stock price target to $12 from $13 but reiterated his Buy rating.
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