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Did General Electric Meet Analyst Revenue Estimates in 4Q17?

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GE’s 4Q17 revenue

General Electric (GE) failed to meet analyst revenue estimates in 4Q17. The company reported revenue of $31.4 billion, roughly 8% lower than the analysts’ estimate of $33.9 billion for that quarter. Compared with the $33.1 billion in 4Q16 revenues, General Electric’s 4Q17 revenue declined 5.1%.

In the last eight quarters, the company surpassed analyst revenue projections in four of the quarters. General Electric’s Industrial segment revenue was $32.2 billion in 4Q17, up 3% on a reported basis due to acquisitions but down 6% on an organic basis.

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Order book position in 4Q17

Total orders in the quarter were $35.0 billion, up 3% but down 5% organically. Out of these, equipment orders were $17.9 billion, and services orders were $17.1 billion. The order book positions of GE’s different verticals in 4Q17 are as follows:

  • GE’s Power division, the worst-performing segment, saw orders of $10.2 billion, down 25%. Equipment orders declined 24%, while services orders were down 26%.
  • GE’s Renewable business witnessed orders worth $3.3 billion, down 2% compared with 4Q16. Equipment orders fell by 19%, while services orders rose 38%.
  • GE’s Aviation segment’s orders were at $8.0 billion, up 11% supported by 2% higher equipment orders and a 17% growth in services orders.
  • Healthcare vertical’s orders jumped 9% to $5.9 billion in 4Q17. Product-wise, Healthcare systems orders rose 9%, whereas Life Sciences orders went up 4% organically. On a geographic market basis, US and European organic orders were up 7% each. Emerging markets orders grew 11% led by China’s 9% and the Middle East’s 35% expansion in orders.
  • Baker Hughes’s (BHGE) orders rose 73% on a reported basis but were down 9% organically to $5.8 billion.
  • Transportation vertical orders were up 56% to $2.1 billion. Equipment orders were flat at $1.1 billion, while services orders declined 23% to $1.0 billion.

Peer group’s 4Q17 revenues

Honeywell International (HON) recorded an 8.6% rise in 4Q17 revenue to $10.8 billion. Industrial (IYJ) solution provider United Technologies (UTX) registered a 7% jump in revenue to $15.7 billion. 3M Company’s (MMM) revenue grew 9% during the quarter to touch ~$8.0 billion. Illinois Tool Works (ITW) saw its 4Q17 revenues rise 6.8% to $3.6 billion.

Next, we’ll consider GE’s operating margins in 4Q17.

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