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Why General Electric Might Not Meet Analyst Estimates in 3Q17

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Why General Electric Might Not Meet Analyst Estimates in 3Q17 PART 1 OF 6

How General Electric Stock Has Trended Since 2Q17 Earnings

General Electric’s 3Q17 earnings

United States industrial behemoth General Electric (GE) is slated to release its 3Q17 earnings on October 20 at 9:30 AM EDT. On 8:30 AM, GE plans to organize an earnings call to share the details with investors and analysts. The company maintains its tradition of announcing quarterly earnings on Friday.

The company’s new CEO, John Flannery, is expected to announce his vision for the company in November. Since GE’s 2Q17 earnings and the reshuffling of the company’s core management team were announced in July 2017, a lot of water has passed under the bridge. Let’s see how the stock moved since GE’s 2Q17 earnings.

How General Electric Stock Has Trended Since 2Q17 Earnings

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General Electric stock price movement

On October 11, General Electric stock slid 1.5% in afternoon trading to $22.8, its lowest close in the last four years. Notably, Berkshire Hathaway sold its entire holding in General Electric in August. Clouds of speculation have still surrounded the stock. The market is expecting GE’s stock price to slump further on the possibility of a guidance cut.

Since the beginning of 2017, shareowners lost 27.3% of value in GE stock. In the last three months, General Electric returned -14.2% to stock owners. The risks to GE are specific and not systemic, as you can see from the returns generated by its peer group in the same duration. Since 2Q17 earnings; here’s how the peer group returns have fared.

  • United Technologies (UTX): -3.8%
  • The 3M Company (MMM): 2.8%
  • Illinois Tool Works (ITW): 4.9%
  • Honeywell International (HON): 5.6%
  • Parker-Hannifin (PH): 9.3%
  • Boeing (BA): 25.1%

The SPDR S&P 500 ETF Trust (SPY) returned 3.8% in the last three months, which ended on October 14.

In this series

In this short 3Q17 pre-earnings series on General Electric, we’ll look at analysts’ revenue and earnings estimates. We’ll also discuss what they recommend for GE and its peer group ahead of the third quarter earnings.

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