GE Earnings Are Not Enough for Investors
Despite seeing a solid beat from General Electric on both the top and bottom lines, investors still did not feel that was enough, even though revenues were up 15% year over year.
General Electric Co. (NYSE: GE) reported its second-quarter financial results before the markets opened on Friday. Despite seeing a solid beat on both the top and bottom lines, investors still did not feel that was enough, even though revenues were up 15% year over year.
The company said that it had $0.51 in earnings per share (EPS) on $33.5 billion in revenue. The Thomson Reuters consensus estimates were $0.46 in EPS on revenue of $31.76 billion. In the same period of last year, GE posted EPS of $0.31 and $29.32 billion in revenue.
Through the second quarter of 2016, GE has returned about $18 billion to shareholders, with roughly $13.7 billion of that from the share buyback plan.
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Jeff Immelt, chair and chief executive of GE, commented:
Investors are seeing the benefits of our portfolio transformation. The GE Capital exit plan enabled GE Capital to return $15 billion in dividends year to date, and our de-designation as a systemically important financial institution gives us more balance sheet flexibility. We will continue to invest in key growth initiatives such as GE Digital, while returning ~$26 billion to investors through buyback and dividends.
During this quarter, the company announced over $25 billion in orders and commitments at the Farnborough Airshow for GE and its partner companies.
Also in the second quarter, GE announced the acquisition of Doosan Engineering & Construction Heat Recovery Steam Generator business, which ultimately will expand its portfolio and offerings.
Immelt added:
The diversity and scale of our portfolio enabled the company to perform well despite a volatile and slow growth economy. We delivered $0.51 of earnings per share with strong execution in Power, Aviation and Healthcare that offset challenging environments in Oil & Gas and Transportation. We expect strong organic growth in the second half of the year and reaffirm our 2016 operating framework.
On the books, GE’s cash and marketable securities totaled $91.8 billion at the end of the quarter, versus $102.5 billion at the end of the previous year.
Shares of GE closed Thursday down about 0.6% at $32.59, with a consensus analyst price target of $33.36 and a 52-week trading range of $19.37 to $33.00. Following the release of the earnings report, the stock was actually down about 2.2% at $31.89 in early trading indications Friday.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
