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HenryTo
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 Posted: Fri Apr 15, 2005 7:15 am Post subject: General Electric (GE) |
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GE beats estimates by a penny, once again. Call me skeptical but it definitely looks like GE is playing an accounting game here as well. GE's businesses are very complex - for the most part, it is a finance company and they also use a lot of derivatives. I would not be surprised if they are investigated at some point down the road. Their profits may be legit this quarter, but I doubt next quarter will be good.
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General Electric Posts Higher 1Q Profit
Friday April 15, 6:51 am ET
General Electric Posts Higher First-Quarter Profit; Industrial Sales Increase 25 Percent
FAIRFIELD, Conn. (AP) -- General Electric Co., the industrial, financial and media powerhouse, said Friday that first-quarter profit rose 25 percent from a year ago, with nine of the company's 11 businesses delivering at least double-digit earnings growth.
Net income grew to $4.04 billion, or 38 cents per share, for the three months ended March 31 from $3.24 billion, or 32 cents per share, a year ago. Revenue increased 19 percent to $39.8 billion from $33.4 billion last year.
Analysts surveyed by Thomson Financial were looking for the company to report earnings of 37 cents per share on sales of $38.02 billion in the latest quarter.
Industrial sales increased 25 percent to $20.8 billion, reflecting the impact of acquisitions and solid organic growth. Financial services revenue rose 13 percent over last year to $19.1 billion.
The company said it received engine, locomotive and services orders in the quarter totaling $4.1 billion, up $600 million over the first quarter of last year, including $2.2 billion in services orders and $1.9 billion in aircraft engine and locomotive orders.
Looking ahead, GE now expects full-year earnings of $1.78 to $1.83 per share, the high end of its target range. Analysts are predicting profit of $1.81 per share, on average.
Last edited by HenryTo on Fri Apr 11, 2008 6:01 am; edited 1 time in total |
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HenryTo
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HenryTo
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| Posted: Sun Apr 22, 2012 7:38 pm Post subject: |
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Morningstar on GE's 1Q earnings.
| Quote: | | General Electric GE started 2012 off on a strong note, producing first-quarter operating earnings of $0.34 per share, up 17% from the prior year after excluding one-time 2011 items. The company increased industrial revenue 14%, with the energy segments as well as aviation and transportation growing double digits from last year. In addition to the strong top-line performance, GE's orders grew 20%, which we think reflects an improvement in end markets and healthy prospects for the next several quarters. From our perspective, the quarter's performance stands out because the earnings growth was driven by the industrial side of the business, with GE Capital remaining essentially flat. Earnings growth is coming from areas where management has made explicit internal and external investments which are finally starting to bear fruit. While GE Capital's earnings were stagnant in the period at $1.8 billion, capitalization ratios remained relatively sound and we're still optimistic about the prospects of a meaningful dividend from GE Capital resuming within 2012. Additionally, GE's real estate business recorded a profit for the first time since 2008, a meaningful sign that the portfolio has recovered from the financial crisis. We expect GE's industrial operations to be the focal point for growth in the portfolio as GE Capital takes more of a backseat. While the recession in Europe will continue to be a drag on overall growth, we think the growth in the United States should more than offset that. Our long-term thesis for the company remains intact and we maintain our fair value estimate. |
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HenryTo
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| Posted: Fri Oct 21, 2011 2:00 pm Post subject: |
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Morningstar on GE's 3Q earnings:
| Quote: | | General Electric GE delivered third-quarter earnings of $0.22 per share, in line with our expectations. After adjusting for the one-time impact of redeeming the Berkshire preferred shares, earnings grew 11% to $0.31 per share. Internal orders grew 6% in the quarter, supporting a backlog of $191 billion, giving us confidence in the firm's ability to grow in the future. Management expects double-digit earnings growth for 2012, one of the few industrial firms to express such conviction at this stage of the cycle. This is in line with our thinking, given the late-cycle nature of GE's end markets and strength in GE Capital. Our long-term thesis is intact, and we maintain our fair vale estimate of $25 per share. Weak pricing in the wind business continues to pressure energy margins, despite encouraging growth out of the thermal energy and oil and gas businesses. The company said energy will begin to see earnings growth in the fourth quarter after being a drag on earnings for the first three quarters of the year. While profitability in aviation fared better than our initial expectations, the weakness in health-care profitability and declines in the home and business solutions business offset any additional gains. GE Capital turned in another solid quarter, with earnings growing versus the prior year due to lower provisions and lower losses on commercial real estate. Ending net investment was down 4% versus the prior year, with all of the reduction coming from lower exposure to noncore assets, offset somewhat by investments in commercial lending and leasing. The plan to start sending the GE Capital dividend back to the parent company in 2012 is still in place, which should further strengthen the cash position at the parent company. On Monday, GE redeemed the Berkshire Hathaway preferred shares, which should provide $0.03 per share of earnings improvement in 2012. Additionally, GE repurchased $1 billion of stock in the quarter, bringing the total repurchase amount to $3.7 billion since the third quarter of 2010. Management restated its commitment to the dividend, and we expect a modest dividend increase announcement in the coming months. |
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rffrydr
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| Posted: Sat Jul 23, 2011 8:38 am Post subject: |
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From LEX:
General Electric: a brighter spark
| Quote: | Not too long ago, unkind critics of Jeff Immelt, Jack Welch’s successor at General Electric, might have remarked that his company’s financial results were a reflection of its motto: “Imagination at work.” Whether it was its streak of “beating by a penny” for so many quarters in a row or later accusations during the financial crisis that the company’s finance unit swept problems under the rug, those days seem to be over, and not just because it beat analyst expectations by two pennies on Friday.
Mr Immelt, about to begin his second decade at the helm of the conglomerate, started his job with the equivalent of one hand, and perhaps a foot, tied behind his back. His legendary predecessor’s retirement was impeccably timed, coming a few days before the September 11 2001 atrocities and with the stock sporting an overhyped 50 price-to-earnings ratio – the sort of number that, even with the pumped-up financial units Mr Immelt would have liked to trim back, could not be sustained. The total shareholder return during his tenure has been negative 35 per cent, with the trailing p/e ratio now below 16.
When finance was driving the “e”, the “p” did not co-operate. The financial crisis gave Mr Immelt the excuse to shift emphasis to the industrial units that grow more slowly during good times but have far better earnings visibility. Industrial revenue rose by a so-so 10 per cent (3 per cent organically) over a year ago but the order backlog has swollen to $189bn. Energy infrastructure and aerospace look particularly promising and recent acquisitions (mainly energy) and disposals (NBC Universal) appear well-timed. Given the more stable profit engines and an undemanding valuation, investors hoping Mr Immelt’s next decade will be more rewarding do not have to be very imaginative at all. |
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HenryTo
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| Posted: Tue Apr 26, 2011 1:11 am Post subject: |
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Morningstar on GE's 1Q earnings:
| Quote: | General Electric GE delivered another strong performance in its first quarter with earnings of $0.33 per share, ahead of our expectations. Management increased the dividend for the third time in nine months, taking the annualized dividend payout to $0.60 per share. As we have expected for several years, we think this quarter's performance underscores the company's strategy to return to the core infrastructure businesses.
Industrial revenue increased 8% from the same quarter last year, as internal revenue increased 5%. All reporting segments delivered growth in the quarter, a sign that GE's portfolio has finally lapped the recovery. We are particularly impressed by the firm's strong order growth of 11%, which we think bodes well for future top-line growth. While the energy business has cooled off from prerecession levels, we are encouraged by the 18% growth in transportation and 9.5% growth in health care.
Operating margins fell to 14.4% from 15.5% in the year-ago period. We think the decline is related to acquisition costs recognized in the first quarter and the addition of new businesses with lower-margin profiles than those in the existing portfolio. We will listen for management commentary on the issue, though, as we model 15.5% industrial operating margin as our normalized assumption.
GE Capital executed well in the quarter, earning $1.8 billion aftertax. Provisions fell to $1.2 billion versus $2.3 billion in the prior year. GE Capital Aviation Services and the consumer business were the only businesses to report meaningful growth in the quarter as management continues to shrink the size of the portfolio. We will probably adjust our outlook for GE Capital, given the better-than-expected decline in provisions.
The dividend increase announcement took us by surprise, as we expected the company to hold off on further dividend action until much later in the year. We view the move as a sign of confidence in the business from management and the board, which is critical following the divestiture of NBC Universal. Following the acquisition of Converteam in the quarter, we expect the company's torrid acquisition pace to cool, though we still expect GE to repurchase the Berkshire BRK.B preferred shares and announce a broader share-repurchase program. This quarter's strong performance punctuates our long-term thesis for GE. We maintain our fair value estimate. |
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rffrydr
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| Posted: Wed Apr 06, 2011 10:19 pm Post subject: |
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This about sums things up:
http://www.investmentu.com/2011/April/general-electric-growth-stock.html
I like the excessive capital idea of fending off the competition but to supposedly be selling the stuff they sell and only 25% coming from EEMs at this point!
What was once overloved continues to feel the neglect.
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rffrydr
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| Posted: Wed Mar 16, 2011 1:12 pm Post subject: |
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No sooner has GE amputated its finance arm that its specialized hard energy assets are whacked:
http://www.bloomberg.com/news/2011-03-16/ge-s-1-billion-in-nuclear-sales-at-risk-as-nations-ponder-industry-future.html
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GE’s Bolze defended the design used at the Dai-Ichi site, saying it operated as expected even under stresses beyond the criteria set by Japanese regulators. GE has assembled 1,000 reactor specialists, including retirees, at an emergency center in Wilmington, North Carolina, where GE-Hitachi is based. |
That GE is a cornerstone investment for institutions makes this misfortune cut far deeper than the indices show. The "D"-word is alive and well.
On the bright side, we did just close this gap. If it holds GE will have been given the benefit of the economic gap:
http://stockcharts.com/h-sc/ui?s=GE:$SPX&p=D&b=5&g=0&id=p59343363227
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rffrydr
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rffrydr
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| Posted: Thu Jul 08, 2010 6:22 am Post subject: |
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GE and CCA Capital launch consumer finance program. Tied with WalMart we may be looking at the beginning of a trend moving past banks:
http://www.newswiretoday.com/news/73367/
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rffrydr
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HenryTo
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| Posted: Sat Apr 17, 2010 10:34 am Post subject: |
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Morningstar on GE's earnings:
| Quote: | General Electric GE produced first-quarter earnings in line with our expectations, demonstrating the resilience of the company's portfolio of businesses through the recession. GE earned $0.21 per share from continuing operations, though a charge related to the discontinued GE Money Japan business lowered total earnings to $0.18 per share. Sales for the industrial businesses declined 2% in the quarter, with more stable service revenues offsetting equipment declines. Lower demand for energy across the globe weighed down growth in the energy segment. Health-care revenues grew in the quarter. We think the removal of uncertainty surrounding health-care reform will lead more U.S. purchasers to commit to orders, and we expect this to boost segment equipment sales in the coming quarters. New orders across the company were lighter than we expected, reflecting a still-timid environment, but we think this will pick up as the global economy gains momentum. Operating margins in the industrial businesses weakened versus last year, to roughly 13% from 14%. Improvement in energy infrastructure offset weakness in NBC Universal, stemming from the Olympics. Restructuring actions taken during 2008-09 should help improve margins in the coming quarters.
Since the beginning of the credit crisis, our underlying thesis for GE Capital has been that the strength and flexibility in the company's balance sheet should enable the firm to weather the storm. The company's financial unit, GE Capital, posted a pre-tax profit for the first time in several quarters. We are encouraged by the second consecutive quarter of pre-tax, pre-provision income growth in light of the business's shrinking asset base. To date, this thesis has played out as we expected. Similar to the fourth quarter, all GE Capital segments except real estate were profitable. As the market for commercial real estate improves, we expect the company to sell properties to reduce its exposure to this non-core asset class. Management mentioned that the expected $2 billion cash injection to GE Capital might be more than necessary given the company's performance in the first quarter. Our fair value estimate assumes a $2 billion payment to GECS, so a smaller payment would be accretive to our valuation.
GE's capital allocation strategy is one of our key concerns at this point. The company is on pace to have more than $25 billion in cash on hand by the end of the year, and there are few gaping holes in the portfolio. As earnings increase, we think the dividend will follow suit. Management has also mentioned the possibility of a buyback of the company's preferred shares, which would alleviate the rich 10% dividend paid on those shares. We think a broader share buyback is on the horizon as well, because management's appetite for growth through acquisitions has waned in recent years. |
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rffrydr
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| Posted: Fri Apr 16, 2010 1:40 pm Post subject: |
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The economy:
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rffrydr
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| Posted: Tue Apr 13, 2010 3:18 pm Post subject: |
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GE in stealth bull and still cheaper than Buffett's buy.
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rffrydr
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| Posted: Tue Mar 16, 2010 5:55 pm Post subject: |
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GE: The outlook for GE has improved, but the company is not expecting to see immediate profit growth. Credit is mending and industrial activity has picked up. The company appears right sized. Here is some color from its conference presentation:
· GE said that said that its credit losses would peak sometime in 2010 and in some parts of the portfolio they had already peaked.
· Substantial cash would be available for capital allocation.
· GE pre-funded debt due in 2010 and has pre-funded $7 bln of the $25 bln of the debt that comes due in 2011.
· GE highlighted the importance of international industrial growth. It noted that revenue from China, India, and South East Asia had jumped from 7% of industrial revenue in 2003 to 10% of industrial revenue in 2009. Resource rich countries (Canada, Australia, Brazil, the Middle East, and Africa) generated 24% of sales in 2009 up from 17% of sales in 2003.
· Dividend growth was expected to return in 2011.
· EPS were expected flat in 2010, forecast to rise marginally in 2011, and witness healthy growth in 2012. No exact numbers were given for 2011 and 2012.
· GE Capital was expected to have losses turn in 2010, and margins were forecast to improve.
· Healthcare and NBCU are seeing improving performance.
· GE was expecting less restructuring but higher pension costs. Reimbursement related stress (government late payment for health programs) and legislative uncertainty were a headwind to healthcare sales.
· Aerospace business was expected to improve. The company noted increased production by Airbus - A320 and higher revenue passenger miles.
· Demand for locomotives is weak and there will be more price pressure (deflation).
· Excess supply and soft demand was present in the wind business.
· Pricing on the industrial side was said to be flat – up 1% to down 1%.
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HenryTo
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| Posted: Sat Jan 23, 2010 10:30 am Post subject: |
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Morningstar's notes on GE's earnings. GE Healthcare still growing very strong, while commercial real estate continues to be a detractor:
| Quote: | General Electric GE produced fourth quarter results that exceeded our expectations for the firm, but we are unlikely to make any material changes to our fair value estimate at this time. Despite industrial revenue's 8.5% decline, GE held operating margins flat at 17.4%. Showing the portfolio's resilience, the high proportion of service revenues helped to offset volume losses, stabilizing overall profitability. While growth in the energy segment has cooled off from the same period a year ago, the oil and gas business expanded 10% in the quarter. Healthcare produced a notable change from its recent trend with increases in orders across its various product lines and geographies--U.S. orders were up 9%, China orders were up 34%, and India orders increased 53%. Given the breadth of the improvements in healthcare, we think the segment is on a solid path for growth going forward.
The company’s financial division, GE Capital, showed signs of improvement in the quarter. Trailing pre-tax, pre-provision income increased for the first time since the second quarter of 2008, indicating the overall health of the portfolio is beginning to strengthen even as managed assets decline. While high unemployment keeps the consumer portfolio's delinquencies high, the commercial loan portfolio's losses have started to recede. However, commercial real estate continues to be a thorn in the side of GE Capital. It was the only GE Capital segment to lose money in the quarter, driven by $315 million of impairments in the equity portfolio. In our opinion, the biggest driver for GE Capital in 2010 is unemployment. As more consumers return to the work force, delinquencies should subside, and businesses would have a stronger reason to reinvest cash currently held on their balance sheets. If broad hiring does not occur, loss provisions are likely to continue to dilute earnings.
Management expects the firm to have roughly $25 billion in cash by the end of 2010, largely attributable to proceeds from the partial divestiture of NBC Universal and GE's paying a lower dividend. While the company maintains that all options are open with regards to capital allocation, we believe the probability of GE's repurchasing shares is fairly high probability. A dividend increase in 2011 is also a strong possibility, given that earnings improve by then. The company plans to evaluate acquisitions less than $2 billion, but would have to make numerous acquisitions to consume all of the cash, giving us reason to believe a buyback is looming.
Even though this was not a blockbuster quarter for GE, we think the firm displayed stability in a tough environment, and the outlook is far better today than a couple of quarters ago. The firm's investment in research and development widens the pipeline for potential growth, giving us confidence that the industrial portfolio will come out of the recession stronger than when it entered it. GE Capital also appears to be on the right path. As the commercial real estate pricing environment improves, we would like to see GE reduce its exposure to that market and focus more on areas where it has identifiable competitive advantages, such as commercial lending and leasing, or aircraft financing. |
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