(Reuters) – General Electric (NYSE:GE) Co posted better-than-expected quarterly free cash flow on Tuesday and set an annual target for the key performance measure at $2.5 billion to $4.5 billion, on the back of better operational management and improvement in its power and renewable energy businesses.
The manufacturing conglomerate’s shares rose 4.8% as it reported free cash flow from industrial operations of $4.37 billion, GE said.
The company had previously predicted a cash flow of at least $2.5 billion in the fourth quarter and a return to positive cash flow for 2021.
Investors had expected about $2.6 billion in fourth-quarter cash flow and $3 billion in 2021, according to Refinitiv data.
Free-cash flow is closely watched by investors as a sign of the health of GE’s operations and ability to pay down debt.
The company, which is still recovering from the economic fallout of the coronavirus pandemic, expects an improvement in its industrial business this year, forecasting a low-single-digit growth in revenues.
Industrial revenues declined 13% in 2020.
Adjusted earnings in 2021 is forecast to come in the range of $0.15 to $0.25 per share compared with $0.01 last year.
GE said it cut costs by more than $2 billion and took other steps to save $3 billion in cash last year in response to the pandemic.
Profit at GE’s power unit rose 3% in the quarter, compared with last year.
Adjusted profit for the fourth quarter ended Dec. 31 came in at 8 cents per share, compared with Refinitiv’s average analyst estimate of a profit of 9 cents per share.