Shares of General Electric Co. (GE) dropped 2.7% in premarket trading on Tuesday following the company’s release of its fourth-quarter earnings report. While the earnings beat expectations, the company provided a downbeat outlook for the future.
Financial Overview
- Net income for the quarter fell to $1.59 billion, or $1.45 per share, compared to $2.10 billion, or $1.90 per share, in the same period last year.
- Adjusted earnings per share, excluding nonrecurring items, came in at $1.03, surpassing the FactSet consensus of 90 cents.
- Total revenue saw a strong growth of 15.4%, reaching $19.42 billion, significantly higher than the FactSet consensus of $17.27 billion.
Segment Performance
- Aerospace revenue experienced an 11.9% increase, reaching $8.52 billion.
- Power revenue rose by 15%, totaling $5.79 billion.
- Renewable Energy revenue showed an impressive jump of 23.4%, amounting to $4.21 billion.
Free Cash Flow and Outlook
- GE reported a free cash flow of $3.0 billion, exceeding the average estimate of two surveyed analysts at FactSet, which projected $2.77 billion.
- The company’s outlook for the first quarter of 2024 is a bit lackluster, with adjusted earnings per share expected to range between 60 cents and 65 cents, falling short of the FactSet consensus of 70 cents.
Market Performance
- GE’s stock has shown a remarkable run-up of 23% over the past three months leading up to Monday, closing at its highest price since October 2017.
- In comparison, the S&P 500 has also seen a solid increase of 15% during the same period.
Overall, General Electric’s fourth-quarter earnings surpassed expectations, contributing to its recent market success. However, its downbeat outlook for the first quarter of 2024 may cast some uncertainty on future prospects.
