Aly Song | Reuters
A man takes a picture of a General Electric (GE) engine at the China International Imports Expo (CIIE) at the National Exhibition and Convention Center of Shanghai, China on November 6, 2018.
General Electric Shares rose Wednesday in pre-market trading after Wall Street analysts said the company's "more detailed disclosure" of insurance liabilities was less risky than last year. The disclosure came in GE's annual report, tabled Tuesday night.
GE Capital paid $ 1.9 billion to GE's insurance subsidiaries in the first quarter of 2019, compared to $ 3.5 billion in the first quarter of 2018. GE GE also expects GE Capital to pay $ 9 billion additional dollars over the next five years.
This gave GE's shareholders "more detailed information about the company's insurance activities in GE Capital," Merrill analyst Andrew Obin said in a note to investors, adding that "these liabilities are probably controlled ".
"The activity has been one of the main concerns of investors in terms of capital requirements beyond the $ 16 billion disclosed a year ago, with positive news about the low additional losses of $ 65 million in 4Q18 providing a turnaround of the action "says Obin.
Although the business is still "not without additional risks related to additional capital requirements", Mr Obin said that GE's insurance portfolio "is probably in very good shape in the medium term".
RBC Capital Markets analyst, Deane Dray, also referred to what he called "detailed information about insurance liability assumptions" in GE's annual report.
"In our opinion, the file represents a new step in GE's progress towards greater transparency, simplified reporting and clearer communications with investors," said Dray.
The lack of change in GE's forecast of total cash outflows of $ 14.5 billion until 2024 was the "most important" update, "said Nicole DeBlase, of Deutsche Bank.This respect for the forecast is important concern about any bad news regarding insurance obligations. "
As the company's quarterly end-of-year report did not include a forecast for 2019 earnings, investors are now turning to the "eagerly awaited GE conference call" on March 14, said Dray .