General Electric Co (GE) revises guidance upward after Q3 profits

Highlights

  • The General Electric Co’s (NYSE: GE) revenue from the jet engine and service division rose by 9.7% YoY to US$5.4 billion in the latest quarter.

  • In addition, GE’s industrial free cash flow of US$1.7 billion was higher than analysts’ estimate of US$1 billion.

  • However, despite challenges, GE expects its full-year profit to be in the range of US$1.80 to US$2.10 per share from the previously estimated US$1.20 to US$2.00.


General Electric Co (NYSE: GE) on Tuesday reported a third-quarter adjusted profit of 57 cents per share, helped by its jet engine business.

Most analysts predicted an adjusted profit of 43 cents a share, according to Refinitiv data.

However, despite the “challenging operating environment,” GE expects its full-year profit to be in the range of US$1.80 to US$2.10 per share from the previously estimated US$1.20 to US$2.00.

The Boston-based company, however, tightened its full year free cash flow forecast to between US$3.75 billion and US$4.75 billion from the earlier estimate of US$3.5 billion and US$5.0 billion.

But it expects higher revenue, margin, and free cash flow growth next year.

The industrial giant said it faced significant challenges due to the global supply chain disruptions, labor crunch, and raw material shortages.

It was also concerned over whether the administration would extend the onshore wind tax credits in the long term. If extended, it is worried that its clients might postpone investments, leading to more expenditures in its renewable energy segment this year.

Besides, the shortages in semiconductor chips and resins posed a considerable challenge, it said. However, it expects the troubles to continue throughout next year that could hurt the business.

Also Read: Raytheon (RTX) raises sales guidance, 3M (MMM) narrows EPS outlook

General Electric Co (NYSE: GE) reported a third-quarter adjusted profit of 57 cents per share, helped by its jet engine business.

Source: Pixabay

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Third-quarter snapshot

GE generated a free cash flow of US$1.7 billion from industrial operations during the quarter, compared with US$514 million in the comparable period a year ago.

The revenue from its jet engine division rose by 9.7% YoY to US$5.4 billion in the latest quarter. In addition, its industrial free cash flow of US$1.7 billion was higher than the rough analysts’ estimate of US$1 billion.

Stock Performance

The GE stock was trading at US$106.55, up 1.19%, in the premarket at 8:49 am ET.

The stock grew by more than 27% YTD. It saw a 52-week high of US$115.32 and a low of US$56.72.

In addition, GE’s forward P/E one-year ratio is 57.54, and the EPS is US$-2.72. Its annualized dividend is US$0.32.

GE’s current market cap is around US$115.583 billion.

Bottomline

The S&P 500 industrial sector rose 18.44% YTD and 7.36% QTD, showing modest industry progress during the period. Thus, the sooner the recovery, the lesser will be the damage. Analysts expect most supply chain issues to be tackled or gradually over by the end of next year.

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