General Electric shares jump on third quarter earnings, outlook rises
Societe Generale Electric (GE) – Get the report from General Electric Company (GE) on Tuesday released higher-than-expected third-quarter results and raised its full-year profit outlook, but cut its industrial cash flow forecast amid what it called an “environment operational difficulties “and” global supply chain disruptions “.
GE said the biggest supply chain impact has come from its healthcare division, adding that it expects the disruption to last for at least the first half of next year, alongside a “more difficult” inflationary environment.
For the three months ending in September, however, General Electric said adjusted non-GAAP earnings were set at 57 cents per share, up 18.75% from the same period last year and 14 cents ahead of consensus Street forecast. Group revenues, General Electric said, fell 1% to $ 18.4 billion, well below analysts’ estimates of a tally of $ 19.251 billion.
Looking at the last few months of the year, GE said it expected profits in the range of $ 1.80 to $ 2.10 per share – compared to its previous forecast of $ 1.20 to 2, $ 00 – and lowered its forecast for industrial free cash flow to $ 3.75 billion to $ 4.75 billion from its previous estimate of $ 3.5 billion and $ 5 billion.
“The GE team had another strong quarter. Orders have increased, margins have increased, our overall cash flow performance has been significantly better and aviation is gaining momentum and showing continued signs of recovery, ”said CEO Larry Culp. “The teams are managing in a challenging operating environment, including global supply chain disruptions and wind market pressure due to the US production tax credit. In this context, we are raising our EPS expectations for 2021 and reducing our free cash flow outlook for the full year. ”
“Our progress in strengthening our balance sheet and operations allows us to generate long-term growth and value in our business,” he added. “With leadership positions in our markets, we offer our customers essential equipment and services that shape the future of flight, advance the health of precision and lead the energy transition. We remain on track to generate high single digit free cash flow margins over time. . ”
Shares of General Electric rose 4.7% early in trading immediately after the results were released to change hands to $ 110.28 each.
Shares of GE have gained about 6.4% since their two-piece adjusted price began on August 2, as investors looked beyond higher-than-expected second-quarter group earnings last week and an improvement in prices. industrial cash flow outlook to the fragility of the global economic recovery and the boom. input costs for the industrial sector.
JPMorgan analysts Stephen Tusa, a longtime GE skeptic who is rated “neutral” with a price target of $ 55 on the stock, said earlier this month that weakening fundamentals are short term makes the long-term anchorages of the industrial group “more optimistic”.
He also suggested that recent portfolio moves, as well as the appointment of a new CEO at GE Healthcare earlier this summer, represent a “plan b” for the company as it operates in a more challenging macroeconomic environment in the world. during the last months of the year.