General Electric Soars, On Track For Record Post-Earnings Day

general electric

General Electric Co. (NYSE: GE)

General Electric on Thursday reported downbeat earnings for the quarter ended Dec 31, 2018, but was able to beat top-line estimates which sent shares higher in the premarket. The multinational conglomerate topped expectations on quarterly revenue over the period sending its stock up in pre-market trading. Shares of the Boston, MA-based company shot up 7.20% to $9.76 in premarket trading from their closing price of $9.10 per share on Wednesday.

General Electric also announced that it has reached a $1.5 billion agreement with the US Justice Department to settle a long-running probe into its defunct subprime-mortgage business known as WMC Mortgage. GE stock has rallied 20% year-to-date after a horrible 2017 and 2018. It is also one of the best S&P 500 components this year.

GE Earnings & Outlook

Fourth-quarter net income came to $574 million, or $0.07 per share, compared with a net loss of $11.00 billion, or $1.27 per share, in the year-ago quarter. Earnings, adjusted for one-time items were $0.17 in the quarter, missing the $0.22 per share expected by analysts polled by Refinitiv.

General electric reported quarterly revenue of $33.28 billion, up 5% from the same period a year ago and above Refinitiv consensus estimate of $32.6 billion. Power segment raked in revenues of $6.76 billion, down 25% year-over-year and well shy of the $7.45 billion Wall Street forecast.

The segment has struggled in recent years and was negatively impacted by continued execution and operational issues, according to the earnings report. General Electric relies on the segment to make turbines that its sells to companies in coal and natural gas power business.

Healthcare unit generated revenues of $5.40 billion, up 2% from the prior-year period and slightly ahead of estimates of $5.39 billion. Meanwhile, Aviation segment revenues rose 21% to $8.46 billion and smashed forecasts of $7.89 billion. Revenues from its renewable energy business totaled $3.36 billion, up 28% year-over-year and above forecasts of $3.18 billion.

General Electric CEO Comments

GE Chairman and CEO H. Lawrence Culp, Jr. said, “Our strategy is clear: de-leverage our balance sheet and strengthen our businesses, starting with Power. To do this, we are improving execution, customer focus, and how we set priorities across GE.”

“I’m confident in our team, technology, and the global reach of GE’s brand and relationships. We have more work to do, but I’m encouraged by the changes we’re making to strengthen GE and create value for our shareholders, customers, and employees.”  

General Electric Co. Profile

General Electric is a multinational conglomerate corporation offering infrastructure and investment in energy infrastructure projects worldwide. The Company operates in various segments, including power and water, oil and gas, energy management, renewable energy, aviation, healthcare, transportation, appliances, energy connections and lighting, GE capital, and more. – Craft