General Electric Set to Announce Strong Third-Quarter Earnings
General Electric (ticker: GE) is poised to reveal its third-quarter earnings on Tuesday, as investors eagerly await positive news that will drive the stock even higher.
Strong Expectations
Wall Street analysts anticipate GE to report earnings per share of 56 cents from sales of $15.5 billion for the quarter. In the previous quarter, GE exceeded expectations by reporting an EPS of 68 cents from sales of $15.9 billion when the market projected just 46 cents per share.
The company's consistent outperformance led it to increase its full-year EPS guidance from a range of $1.70 to $2 to a new range of $2.10 to $2.30. Additionally, GE raised its forecasted 2023 free cash flow from $3.8 billion to approximately $4.4 billion.
Encouraging Stock Performance
Following the second-quarter earnings release, the stock surged by 6.3%, reflecting investors' optimism about GE's future prospects. Notably, GE stock has gained over 85% over the past 12 months, significantly outperforming the S&P 500 and Dow Jones Industrial Average, which have risen by approximately 10% and 5% respectively during the same period.
Analysts' Predictions
In a preview report, RBC analyst Deane Dray stated, "We expect GE to boost its 2023 EPS guidance range, moving from a range of $2.10 to $2.30 to $2.25 to $2.35. This compares to our estimate of $2.25 and consensus of $2.35." This projection indicates that Wall Street has high expectations for GE's performance, with an average estimate surpassing the high end of the company's guidance.
Focus on GE Vernova Spin-Off
Investors will also closely monitor any updates regarding the upcoming spin-off of GE Vernova, which encompasses GE's renewable power and energy generation businesses. The spin-off is scheduled to take place in early 2024, and GE recently announced key leadership appointments to facilitate the process.
Transition into GE Aerospace
Following the spin-off, GE will transform into GE Aerospace, consolidating its position as a leading manufacturer of aircraft engines. Investors are keen to learn about the current state of the commercial aviation industry, particularly with regards to the potential impact of rising interest rates on demand for long-lead-time items like jet engines and power turbines.
Conference Call and Results
To discuss the third-quarter results, GE management will hold a conference call at 7:30 a.m. Eastern Time.
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