What to Expect From GE Earnings

January 21, 2016 by Chris Lange

General Electric Co. (NYSE: GE) is expected to post its fourth-quarter financial results before the markets open Friday. The consensus estimates from Thomson Reuters call for $0.50 in earnings per share (EPS) on $36.02 billion in revenue. The same quarter from the previous year had $0.56 in EPS on $42.00 billion in revenue.

The company is expecting a boost in 2016 in the form of a massive share buyback. The GE board has authorized the repurchase of up to $50 billion in common stock, and it is expected to cut its share count by up to 8.5 billion by 2018. GE has indicated that it plans to maintain its dividend at the current level in 2016 and grow it thereafter.

However, there are of course some cautionary views for GE ahead. The strong dollar is a continual pressure on any U.S. industrial company that wants to export goods. GE also has been unable to shed its GE Appliances unit, a sale that was somewhat surprisingly blocked by U.S. regulators.

Another consideration when looking ahead is that many of GE’s catalysts that propelled shares higher in 2015 have now played out — even that never-ending Alstom acquisition, for the most part. Those play-out issues are why Credit Suisse removed GE from its core Focus list late in 2015. GE also has lots of exposure in the world’s growth markets, where growth has been slowing.


Prior to the release of the earnings report, a few analysts weighed in on GE:

  • William Blair reiterated an Outperform rating with a $38 price target.
  • Citigroup initiated coverage with a Buy rating and a $28 price target.
  • Stifel has a Buy rating and a $31 price target.
  • Morgan Stanley has a Neutral rating with a $30 price target.
  • Barclays has an Overweight rating with a $34 price target.

So far in 2016, GE has been relatively in line with the broad markets, with the stock down only about 10%. However, over the past 52 weeks the stock has done much better with shares up over 21%.

Shares of GE were trading up 3% to $28.83 on Thursday, with a consensus analyst price target of $32.38 and a 52-week trading range of $19.37 to $31.49.

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