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General Electric (GE) to Post Q4 Earnings: What to Expect?

Zacks Equity Research

General Electric Company GE is scheduled to report fourth-quarter 2019 results on Jan 29, 2020, before the market opens.

The company delivered better-than-expected results in three of the last four quarters while lagged estimates in one. Earnings surprise for the period was a positive 29.17%, on average. On the last reported quarter, the company’s earnings of 15 cents per share surpassed the Zacks Consensus Estimate of 12 cents by 25%.

In the past three months, the industrial conglomerate’s shares have gained 29.1% compared with the industry’s growth of 10.5%.




Let us delve deeper.

Key Factors and Estimates

International presence, efforts to lower debts and digital business are predicted to have supported General Electric’s performance in the fourth quarter. Also, the company’s efforts to restructure its businesses and improve liquidity position might get reflected in the quarter’s results.

On the flip side, prevailing challenges in the Power segment — including operational challenges, pricing issues, overcapacity in the industry, project execution problems and others — might have adversely impacted its fourth-quarter performance. Also, unfavorable movements in foreign currencies and weakness in the margin of Renewable Energy might have been headwinds.

The Zack Consensus Estimate for the company’s earnings per share is pegged at 18 cents, indicating growth of 5.9% from the year-ago quarter’s reported figure and 20% increase sequentially. The consensus estimate for revenues of $26,162 million suggests a 21.4% fall from the year-ago quarter’s reported figure and 12% growth sequentially.

On a segmental basis, restructuring activities within Power might have aided its performance in the quarter, while the popularity of LEAP engines and strengthening services businesses are likely to have driven Aviation’s performance. Further, solid orders, efforts to offer new products and cost-saving actions are likely to have supported Renewable Energy.

For the fourth quarter of 2019, the Zacks Consensus Estimate for the Power segment’s revenues is pegged at $4,785 million, suggesting a decline of 29.2% from the year-ago reported figure and sequential growth of 21.9%. The estimate for Aviation indicates growth of 6.6% year over year and 11.2% sequentially. The same for Renewable Energy suggests growth of 59.1% from the year-ago quarter’s reported number and a 20.9% increase from the previous quarter’s figure.

Notably, the Zacks Consensus Estimate for the Industrial segment’s (comprising Power, Aviation, Renewable Energy and Healthcare) revenues for the to-be-reported quarter is pegged at $24,443 million, suggesting 14.3% growth from the previous quarter’s reported figure and a 23.2% decrease from the year-ago quarter’s number. Profits for the Industrial segment are likely to be $3,397 million, indicating 38.7% rise from the previous quarter’s reported figure and 29.8% growth from the year-ago quarter’s number.

Earnings Whispers

Our proven model doesn’t conclusively predict an earnings beat for General Electric this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: The company has an Earnings ESP of 0.00%, as the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 18 cents.

General Electric Company Price, Consensus and EPS Surprise

 

General Electric Company Price, Consensus and EPS Surprise

General Electric Company price-consensus-eps-surprise-chart | General Electric Company Quote

Zacks Rank: General Electric currently carries a Zacks Rank #4 (Sell).

Stocks That Warrant a Look

Here are some companies that you may want to consider as according to our model, these have the right combination of elements to post an earnings beat this quarter:

Tennant Company TNC presently has an Earnings ESP of +4.20% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Honeywell International Inc. HON presently has an Earnings ESP of +0.49% and a Zacks Rank #3.

Plug Power, Inc. PLUG presently has an Earnings ESP of +8.33% and a Zacks Rank #3.

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