Apart from the power business, General Electric’s (GE) Transportation and Legacy segment’s lighting division has also struggled for years. Train budgetary cuts in several global economies and massive competition are hurting the transportation businesses’ revenues and margins. Intensified competition from local and regional players in every market is hurting the lighting division’s sales.
The underperformance of the businesses mentioned above has been weighing on General Electric’s overall revenues and profitability growth. General Electric’s third-quarter top-line performance was more disappointing than the performances of most of its peers in the industrial sector (IYJ).
The company’s third-quarter total revenues fell 4% YoY (year-over-year) to $29.6 billion and missed analysts’ consensus expectation of $29.9 billion. United Technologies (UTX), Honeywell International (HON), and Crane Company (CR) all reported better-than-expected revenues and marked improvements YoY.
For the last few years, General Electric has been evaluating sales and spin-off options to optimize its business. In June, the company announced a massive restructuring plan. Under the restructuring plan, General Electric decided to divest and split off certain assets to focus on only three sectors—aviation, renewable energy, and power.
According to the restructuring plan, General Electric intends to exit the oil and gas business, divest its lighting division, and spin off its Healthcare segment into a standalone company. On November 13, General Electric announced that it entered a series of agreements with Baker Hughes (BHGE). The agreements include a stake sale in Baker Hughes that would raise almost $4 billion for General Electric.
On November 16, General Electric announced that its lending arm, GE Capital, had sold $1.5 billion worth of its healthcare equipment finance portfolio to TIAA Bank. The company announced that it would sell up to 49.9% of its Healthcare business and then spin-off the unit as a standalone company.
For the Transportation segment, General Electric has entered into an agreement with Wabtec. According to the agreement, General Electric will receive a $2.9 billion up-front cash payment. General Electric’s shareholders will own 50.1% in the combined company.
General Electric intends to completely divest its lighting division, which generated ~$1 billion in revenues in 2017. The segment’s revenues fell 18% YoY to $385 million in the third quarter. As part of General Electric’s strategy, the company sold its energy efficiency business unit, Current, to private equity firm American Industrial Partners.
General Electric’s (GE) Transportation segment manufactures trains, marine diesel engines, and mining equipment.
Broadcom (AVGO) stock fell ~8.5% after markets closed yesterday following the semiconductor giant's fiscal 2019 second-quarter earnings release. It missed analysts' revenue estimate and cut its fiscal 2019 revenue guidance by $2 billion to $22.5 billion due to sluggishness in its semiconductor solutions business.
The SPDR Gold Shares ETF (GLD), which tracks physical gold prices, has underperformed the broader markets year-to-date, rising just 4.4% compared to the S&P 500’s (SPY) gain of 15.9% as of June 14. The sentiment for gold, however, has been turning around.
Safe havens such as Treasuries and gold were back in favor on June 14 as stocks fell due to rising tensions in the Middle East, concerns over growth, and the looming threat of the US-China trade war. The tech-heavy Nasdaq Composite Index fell 0.67% in the first hour of trading.
Lululemon (LULU) stock rose 2.1% on June 13 in reaction to better-than-expected first-quarter results and an upgraded outlook for fiscal 2019 overall. The company's first-quarter adjusted EPS grew 34.5% to $0.74 on revenue growth of 20.4% to $782.32 million. Analysts had expected EPS of $0.70 and revenue of $755.31 million. Here's why the outlook got an upgrade.
As of 4:40 AM Eastern Time today, US crude oil active futures were at $51.83, ~4% below their closing level in the previous week. If US crude oil prices stay at those levels today, they'll mark their third week of decline in five weeks.
Amazon is discontinuing its Amazon Restaurants service, which has been delivering food for restaurants in parts of the United States. Amazon Restaurants launched in the United States in 2015 and entered the British market the following year. However, it met strong opposition in the British market.