GE shares close down after CEO forecasts negative cash flow in 2019

Fox Business

Joe Williams

Mar 05, 2019

SharesOpens a New Window. of General ElectricOpens a New Window. closed down on Wall Street on Tuesday after CEO Larry Culp forecasted free cash flow at the struggling industrial giantOpens a New Window.would be negative in 2019, raising concerns among some analysts over the future of the company's debt rating.

“We have to pay the piper in 2019, we’re going to do that,” Culp said at an investor conference hosted by J.P. Morgan.

The Boston-based firm in 2018 had $4.5 billion in cash flow, or the amount of money remaining after expenses and capital expenditures are taken out. But increased restructuring costs -- which are expected to top in 2019 the $2 billion spent last year -- and losses in GE's struggling power sector are weighing on the company.

"Cash flow is one of the most important elements that factor into the ratings outlook by the debt ratings agencies," Gordon Haskett analyst John Inch wrote in a note on Tuesday. "We believe the risk of additional debt ratings downgrades has now increased."