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United States GE earnings: Can final report before breakup give investors more reason to cheer?
General Electric Co. is scheduled report fourth-quarter results before the market opens on Tuesday, which could be the last report before the final breakup of the 150-year-old company.
GE’s stock GE, +1.09% has been on fire leading up to the latest results. After having its best year on record in 2023, the stock is up another 3.1% year to date through Monday afternoon, to outperform the S&P 500 index’s SPX 1.7% gain.
Helping fuel the gains, the stock has rallied on the day that the past two quarterly reports were released, with the post-earnings gains the biggest since the third- and fourth-quarter results of 2019 were reported.
Read: GE’s stock sees biggest rally in more than two years after big earnings beat, raised outlook
For Tuesday’s results, keep in mind that the stock hasn’t registered a post-earnings gain for three straight quarters in more than five years, based on FactSet data going back to the third quarter of 2018.
Meanwhile, Wall Street has become more optimistic about GE’s bottom line in recent months. The FactSet consensus for adjusted earnings per share increased to 89 cents as of Monday, from 85 cents since the end of the third quarter.
The company has beat adjusted EPS expectations in the past four quarters and in 10 of the past 11 quarters.
The FactSet revenue consensus is currently $17.27 billion, which is up slightly from $17.25 billion as of the end of the third quarter.
In GE’s third-quarter results, the big earnings and revenue beats were driven by strength in the GE Aerospace business, which saw revenue soar more than 25% from the same period a year ago. For the latest quarter, the consensus for aerospace revenue of $8.5 billion implies year-over-year growth of 11.6%.
Among other fourth-quarter metrics for investors to watch, the average estimate of the two analysts surveyed by FactSet is for free cash flow of $2.77 billion, which compares with free cash flow of $1.67 billion in the third quarter and of $4.29 billion a year ago.
The FactSet consensus is for power revenue of $4.89 billion, down 2.8% from a year ago, and for renewable-energy revenue to grow 8.6% to $3.71 billion.
In the third quarter, the company said that given the strength of GE Aerospace and the improvement of GE Vernova, the full-year adjusted EPS guidance range was boosted to $2.55-$2.65 from $2.10-$2.30.
For 2024, the current FactSet consensus is for adjusted EPS of $4.59.
Separately, GE has said that it will spin off its power and renewable-energy business as GE Vernova at the start of the second quarter, and the remaining business will be relaunched as GE Aerospace, with the stocks of both companies listing on the New York Stock Exchange. The company separated its healthcare business as GE HealthCare Technologies Inc. GEHC, +0.72% in December 2022.
While the first-quarter results in the second half of April will cover pre-breakup results, the report could be released after the breakup occurs.
