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General Electric’s 1Q17 Results Beat Estimates: Stock Fell 2.5%

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Part 2
General Electric’s 1Q17 Results Beat Estimates: Stock Fell 2.5% PART 2 OF 12

A Deep Dive into General Electric’s 1Q17 Revenue

GE’s 1Q17 revenue

As we saw in the first part of this series, General Electric (GE) surpassed the earnings estimate in 1Q17. But it also beat the revenue estimate by 4.8%. Its revenue was $27.6 billion, while the Wall Street estimate was $26.3 billion. On a year-over-year basis, GE’s 1Q17 revenue fell 1.0%.

A Deep Dive into General Electric&#8217;s 1Q17 Revenue

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The 1Q17 organic revenue growth of GE’s industrial business, not including acquisitions, was 7.0% compared to 1Q16. Its industrial revenue was $25.0 billion, a 1.0% rise on a reported basis compared to 1Q16. In fiscal 2016, this revenue rose 4.0%. It’s worth noting that its digital revenue rose 16.0% in 1Q17.

Order book position

On a positive note, GE’s equipment orders rose 11.0%, and service orders rose 8.0% in 1Q17. On an overall basis, industrial orders rose 10.0% on a reported basis and 7.0% organically. Total orders were $25.7 billion for the reported quarter.

In 1Q17, General Electric witnessed its best Oil & Gas segment orders in the last ten quarters. Oil & Gas equipment orders rose 30.0% in the quarter compared to 1Q16.

Management’s thoughts on 1Q17 revenue

According to Jeffrey Immelt, GE’s CEO (chief executive officer), “Orders were very strong in the quarter, up 10%, which was 7% organically. Backlog grew by $3 billion. Equipment had a great quarter with growth of 11%. Services were strong as well with growth of 8%. Pricing was about flat. Orders growth was broad-based. We saw expansion in 6 of 7 segments in 9 of 12 regions.”

ETF investment

General Electric makes up 9.2% of the Industrial Select Sector SPDR ETF (XLI). GE’s large-capitalization peers are 3M (MMM), Honeywell International (HON), and Illinois Tool Works (ITW). HON declared its results on the same day as GE. HON’s reported revenue growth was flat in 1Q17. 3M is reporting its 1Q17 earnings on April 25, 2017.

In the next part of this series, we’ll look at the results for GE’s Aviation segment.

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