(Reuters) – General Electric Co said on Thursday that 2019 would be a difficult, “reset” year, but promised a better performance in terms of earnings from 2020 and beyond, sending shares higher.

FILE PHOTO: The logo of U.S. conglomerate General Electric is pictured at the company’s site of its energy branch in Belfort, France, February 5, 2019. REUTERS/Vincent Kessler/File Photo

The U.S. industrial conglomerate said adjusted earnings would fall below analyst estimates of 70 cents a share, and that it could lose as much as $2 billion in cash from its industrial businesses, putting a number on a warning it issued last week.

GE shares surged 3.7 percent to $10.39 in morning trading, after dropping as much as 4 percent in premarket activity shortly after releasing its forecast. Its bonds were up slightly.

Chief Executive Officer Larry Culp said GE will invest $2.5 billion in restructuring that will yield returns after 2019.

“This is what constitutes a reset,” Culp said on a conference call.

The company did not note any effect on its jet engine division from the global grounding of Boeing Co 737 MAX aircraft, following the crash of an Ethiopian Airlines flight on Sunday that cost 157 lives.

The LEAP engine that powers all of Boeing’s 737 MAX planes is produced by CFM International, a joint venture of GE and Safran SA of France.

Culp reiterated his priorities of trimming debt and improving the performance of GE’s industrial businesses, especially the ailing power-plant division.

GE expects free cash flow for its power business to remain negative in 2020 before turning positive in 2021. Investors are looking closely at GE’s cash and earnings after the company lost nearly $23 billion last year.

Adjusted industrial free cash flow for all of the industrial business should be between breaking even and a negative $2 billion, before turning positive in 2020, with the pace of improvement accelerating in 2021, Culp said.

That outlook is “arguably better than expected,” said Deane Dray, an analyst at RBC Capital Markets.

As the first outsider to head the 127-year-old company, Culp has cracked open GE’s books to more scrutiny, shaken up its board and appointed new leaders in trouble spots like power and insurance. His efforts appeared to be on the right track on Thursday as analysts on the conference call said they appreciated the detailed outlook presentation.

Additional reporting by Rachit Vats and Sanjana Shivdas in Bengaluru and Kate Duguid in New York; Editing by James Emmanuel and Bernadette Baum



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