GE burns through another $1 billion. But its outlook is improving

General Electric burned through another $1 billion in cash during the second quarter, but the struggling conglomerate continues to make headway in recovering from a disastrous past few years.

GE’s better-than-feared results and forecast suggest the company’s beleaguered power division could be turning a corner.

That recovery will continue without GE’s finance chief, however. The company announced that Jamie Miller plans to step down from her role as chief financial officer. GE has launched a search to find a replacement.

GE’s rapid decline has been driven in large part by problems at its power division, which is very exposed to power plants switching to renewable energy and away from fossil fuels.

Orders tumbled by 22% at GE Power, which makes turbines and systems for natural gas and coal power plants. Profit plunged 71% to $117 million in the division.

Pressured by power, GE reported negative industrial free cash flow of nearly $1 billion, compared with positive free cash flow of $316 million the year before. That’s at the low end of the previous guidance from the company.

However, GE’s per-share earnings topped Wall Street’s expectations.

And GE CEO Larry Culp hailed “improvements” at GE Power, which has been shutting down plants to adjust to shifting dynamics.

That progress, along with lower restructuring costs and other positives, led GE to raise its full-year outlook. GE now anticipates industrial free cash flow between negative $1 billion and positive $1 billion for 2019. GE previously warned it could burn through as much as $2 billion on the year.

GE also raised its adjusted earnings per share and organic revenue guidance.

The company’s stock, which was kicked out of the Dow Jones Industrial Average last summer, jumped 5% in premarket trading.

“We will continue to take planned actions to improve our businesses and monitor some market headwinds,” Culp said in a statement.

GE did not give a reason for Miller’s departure as CFO. The company said she has agreed to remain in her role for now to assist with a smooth transition. Miller was at the center of GE’s effort to clean up its debt-riddled balance sheet by unloading businesses.

Some investors feared GE faced an existential crisis last year due to its cash problems. However, those fears have largely subsided, underscored by the surge of more than 40% in GE’s stock this year.

“With the progress we’ve made and the stabilization beginning to take hold,” Miller said, “the time is right for my transition.”