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GE sees improvement in company businesses in H2

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© Reuters. A traffic light is seen in front of a logo of General Electric at the company’s plant in Birr, Switzerland June 17, 2019. REUTERS/Arnd Wiegmann

By Rajesh Kumar Singh

CHICAGO (Reuters) -General Electric Co on Thursday said it expects an improvement across its businesses in the second half of the year despite persistent inflationary and supply chain pressures.

But Chief Financial Officer Carolina Dybeck Happe said the company expects to burn cash in the current quarter despite an improvement in cash flow.

GE’s shares were down 1.6% at $71.30 in afternoon trade.

The Boston-based industrial conglomerate last month said it was trending toward the lower end of its full-year earnings forecast, citing fresh COVID-19 pandemic-related lockdowns in China as well as the war in Ukraine.

To mitigate the impact, the company has raised prices for its products and is invoking price escalation clauses in its service contracts. It is also trying to find alternative sources for parts and improve productivity to reduce cost.

While the company has not seen any “material” change in the COVID-19 situation in China, Happe said the measures are expected to result in an improved performance in the second half of the year.

“Nothing is certain in an environment where so much is changing day to day,” she told Goldman Sachs (NYSE:GS) Industrials & Materials Conference. “But clearly, we have a path to significant growth in the second half.”

The company has projected adjusted profit for 2022 to be in the range of $2.80 to $3.50 per share. It also expects to post high-single-digit revenue growth this year and generate $5.5 billion to $6.5 billion in free cash flow.

Happe said GE expects to generate closer to about 55% of the projected revenue, 65% of operating profit, 75% to 80% of net earnings, and more than 100% of free cash flow in the second half of the year on the back of “significant” growth in aviation and healthcare businesses.

In case full-year earnings do come at the lower end of its estimate, Happe said it would reduce the odds of the company generating more than $7 billion in free cash flow next year.

“It’s going to be less of a plus, but we do have a path to $7 billion of free cash flow,” she said.

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Tencent Music Reports Q1 Miss, Revenues Down 15.1%

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© Reuters. Tencent Music (TME) Tencent Music Reports Q1 Miss, Revenues Down 15.1%

Tencent Music Entertainment Group (NYSE:TME) reported its Q1 results, with EPS of $0.06 coming in worse than the consensus estimate of $0.07. Total revenues declined 15.1% year-over-year to $1.05 billion, missing the consensus estimate of $1.23 billion, due to the headwinds in an evolving market landscape.

Revenues from online music services in Q1 were down 4.8% to $413 million. Revenues from music subscriptions grew 17.8% year-over-year to $314 million, with online music paying users reaching 80.2 million (up 31.7% year-over-year) and paying ratio increasing to 13.3% from 12.4% and 9.9% in Q4 and Q1/21, respectively.

Revenues from social entertainment services and others in Q1 were down 20.6% to $635 million.

Shares of Tencent Music were down 40% year-to-date into the results.

By Davit Kirakosyan

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Rivian Automotive CEO Purchases $1 Million Worth of Stock

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© Reuters Rivian Automotive CEO Purchases $1 Million Worth of Stock

According to SEC Form 4, on May 16, Robert Scaringe, the CEO of Rivian Automotive Inc (NASDAQ:RIVN), purchased 41,000 shares of the company’s Class A common stock at an average price of $25.7772. The total amount of purchased shares is approximately $1.05 million.

Following the purchase, Scaringe owns 169,175 shares directly, 4,337,997 through a trust and 4,595 by LLC.

Shares of Rivian are down 76% year-to-date given the correction in high-multiple stocks and supply chain issues faced by the EV maker.

By Davit Kirakosyan

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Buffett-backed Nubank swings to profit on strong client base, loan volumes

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© Reuters. FILE PHOTO: A banner for Nubank, the Brazilian FinTech startup, hangs on the facade at the New York Stock Exchange (NYSE) to celebrate the company’s IPO in New York, U.S., December 9, 2021. REUTERS/Brendan McDermid

(Reuters) – Nubank swung to a profit for the first quarter and reported record-high revenue as Latin America’s most valuable fintech benefited from strong growth in its loan book and clients.

The Brazilian digital bank backed by Warren Buffett’s Berkshire Hathaway (NYSE:BRKa) said on Monday its revenue more than tripled to $877.2 million, driven by a record-high activity rate.

This is Nubank’s second set of results since listing in December.

According to analysts, the digital bank is well-positioned to weather an ongoing deterioration in credit quality in Brazil as its portfolio skews heavily toward low-risk, low-yielding credit card receivables.

The company added 5.7 million new clients and said its average revenue per active client grew to $6.7, up 63% from the previous quarter.

It posted an adjusted net income of $10 million for the quarter, compared with an adjusted loss of $11.9 million a year earlier.

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