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GE Comfortably Beats on Q1 Earnings, 2017 View Reiterated


Industrial goods manufacturer General Electric Company GE has completed the last major asset sale transaction of GE Capital exit plan in order to retrace its engineering roots and create a simpler and nimbler firm with a re-focus on core operations. From a classic conglomerate with diversified business interests in financial services, media, industrial and technology-based operations, the company has pruned its operating portfolio to focus on core manufacturing businesses with a digital edge.

At the same time, GE has been selectively acquiring assets to boost its Industrial Internet vision. Such opportune transactions are likely to improve the top line of the company. In addition, GE has also inked a definitive agreement with Baker Hughes Incorporated to merge its Oil & Gas business with the latter to form an industry leader with an unrivalled mix of service and equipment capabilities. However, for a company as large as GE, additional revenues needed for growth are quite large, posing a challenge in developing businesses on such a vast scale. In the last four trailing quarters, GE has reported a positive average earnings surprise of 3.5%, beating estimates twice.

Earnings estimate revisions have remained static in the last month as investors retain a neutral stance about the performance of the company. Currently, GE has a Zacks Rank #3 (Hold), but that could definitely change following first-quarter 2017 earnings report, which was just released. We have highlighted some of the key stats from this just-revealed announcement below:

Earnings: GE operating earnings beats estimates. The Zacks Consensus Estimate called for EPS of 17 cents, and the company reported operating+verticals EPS of 21 cents.

General Electric Company Price and EPS Surprise

General Electric Company Price and EPS Surprise | General Electric Company Quote

Revenue: Quarterly revenues exceed estimates. GE posted consolidated revenues of $27,660 million, compared with Zacks Consensus Estimate of $26,362 million.

Key Stats to Note: GE has reiterated its operating framework for 2017 and continues to expect industrial operating+vertical EPS in the range of $1.60–$1.70, representing organic growth of 3–5%, and remains confident to return $19–$21 billion to shareholders.

Stock Price: Shares were relative flat in pre-market trading following the release at the time of write-up as investors probably looked for a bullish outlook.

Check back our full write up on this GE earnings report later!

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