General Electric saw a significant incline on Tuesday after they announced their first quarter earnings. The reason for the surge in share value was due to GE beating Wall Streets estimates, as although the company showed weakness in their power sector, strength in their oil, aviation and gas sectors made up for the loss.
The industrial giant posted recently adjusted earnings of 14cenrs on revenue per share of $27.3 Billion USD. Analysts had estimated 9 cents with a revenue of $27.11 Billion USD, this according to Bloomberg analysts. It would seem that GE’s profits have been on a steady inline over the course of the course of the last year, in which the EPS was only 3 cents compared to today’s 11. The recently published earnings were enough to send investors on a buying spree, which caused the stock to rally up 7% from Monday’s close.
In recent months GE has been struggling with less than helpful liquidity issue, which they have been attempting to resolve by cutting costings, and lowering there debt. In the first financial quarter of 2019 GE saw negative free cash flows, which is a highly interesting figure when it comes to analyzing company’s. GE posted a $1.2 Billion USD negative cash flow, a marked improvement from the negative $1.8 Billion just a year ago. The company’s most watched sectors include its aviation, health care, and capital segments. However GE is currently facing difficulties with the under performance of its power business, which experts at the company expect to pare by over $400 million USD this year alone..
In their first quarter reports, GE’s power business took a drastic decline by 14% year over year as expected by analysts, and revenue for the sector dropped by 22%. On a more positive side to things, GE’s aviation, oil and gas sectors countered this shortfall. Figures in the aviation field surged over 12% from last year, while oil and gas saw a 4% jump. Analysts at UBS have recently made a statement saying the the bottom is in sight for GE’s failing power business, giving the stock a buy rating and a price target of $13 USD per share.
GE’s stock closed up 4.52% up on Tuesday’s trading which signals more positive momentum for shareholders.
Henry Scott – Walter International