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GE Lowers Its 2016 Guidance as Orders Fall on Weak Oil and Gas

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GE Lowers Its 2016 Guidance as Orders Fall on Weak Oil and Gas PART 1 OF 6

GE’s 3Q16 Earnings Surpass Analysts’ Estimate, Concerns Remain

GE’s 3Q16 earnings

General Electric (GE), one of the most iconic US companies, announced its 3Q16 results on October 21, 2016. The industrial behemoth surpassed Bloomberg-surveyed analysts’ consensus earnings estimate by 6.7%.

The company’s adjusted earnings per share (or EPS) were $0.32 in 3Q16, whereas analysts had forecast EPS of $0.30. Notably, GE has beaten consensus earnings estimates in seven out of the last eight quarters.

GE&#8217;s 3Q16 Earnings Surpass Analysts’ Estimate, Concerns Remain

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GE’s EPS 

GE’s industrial plus vertical operating EPS were $0.32, up from 10% in 3Q16 on a year-over-year basis. The company’s operating EPS, including industrial plus verticals, is expected to range between $1.48 and $1.52 in 2016. The company’s EPS from continuing operations, including the impact of non-operating pension, came in at $0.23, compared to analysts’ expectation of $0.28. Its net EPS, including discontinued operations, was $0.22.

GE’s Alstom power business is expected to contribute $0.05 EPS in the current year, excluding the impact of foreign exchange translations.

Stock price reaction  

A close look at General Electric’s stock price in the last couple of trading sessions reveals that the market has already factored in the company’s 3Q16 results. On October 21, 2016, the stock fell 0.3% and closed at $28.98. On the same day, the SPDR S&P 500 ETF (SPY), which tracks the broad market, rose slightly. Let’s see how GE’s peer group reacted to the industrial giant’s 3Q16 results:

  • Illinois Tool Works (ITW) fell 0.2%.
  • 3M Company (MMM) fell 0.2%.
  • United Technologies (UTX) fell 0.6%.
  • Honeywell International (HON) rose 0.8%.
  • Parker-Hannifin (PH) rose 0.3%.

In this series

In this post-earnings series, we’ll review the performances of GE’s major segments. We’ll also see how analysts view GE after its 3Q16 results.

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