GE Stock (NYSE:GE)
The stock of General Electric (NYSE:GE) has been on fire thus far in 2023, which has increased investors’ expectations for the company’s earnings for the first quarter.
General Electric, commonly known as GE, is a multinational conglomerate that has been around for over a century. With a long-standing history and an extensive range of products and services, GE has played a significant role in shaping the modern world. However, like many large corporations, GE has faced its fair share of challenges over the years, particularly in recent times. The COVID-19 pandemic has significantly impacted businesses across the board, and GE was no exception. With a tumultuous past and a difficult present, GE needed a strong quarter to continue its ascent in the market. The company’s earnings report for Q1 2023 was even more successful than expected, setting a positive tone for the future.
Nevertheless, General Electric (NYSE:GE) appears to have passed the test after reporting results that were better than expected on Tuesday morning.
Early on in trading, the shares had a 1.4% gain, but those gains have since been wiped out by the market’s decline. During the middle of the trading day, the stock price fell 1.7%. Both the S&P 500 and the Dow Jones Industrial Average are currently trading with losses of approximately 0.8% and 0.3%, respectively.
GE announced adjusted earnings per share of 27 cents, while the company’s revenue was $13.7 billion. On average, investors on Wall Street anticipated a profit of 14 cents per share on revenue of $13.3 billion.
A year before, during the same quarter, GE posted adjusted earnings per share of 24 cents on sales of $16.3 billion. These results, on the other hand, cannot be compared with one another because they contain the data from GE HealthCare Technologies (NASDAQ:GEHC), which was separated from GE at the beginning of the year 2023.
In the first quarter, aerospace orders were $8.2 billion, representing a year-over-year increase of 14%. This figure was greater than the $7 billion in first-quarter sales. The total amount of orders related to power generation was approximately $9.5 billion, which was significantly more than the sales total of $6.7 billion.
The aviation industry as well as the wind and gas power generation firms saw an increase in their profit margins, although the wind power industry continued to incur a loss.
Additionally, GE raised the bottom of the range of the company’s financial guidance for the full year. In comparison to the previous guidance range of $1.60 to $2, analysts anticipate earnings per share in the range of $1.70 to $2. And the free cash flow forecast at the midpoint has increased to $3.9 billion, up from $3.8 billion previously.
The Chief Executive Officer, Larry Culp, stated in an interview with Barron’s that the business did not take a more aggressive approach to provide guidance because the first quarter only accounts for approximately 15% of the projected earnings.
Culp is positive about the future and believes that conservatism is not a bad thing. He says, “The way the businesses are operating today compared with where we were at a year ago, three years ago…gives us confidence about the rest of the year, and going into ’24.”
This is a reliable report. In a study that was released on Tuesday, RBC analyst Deane Dray described the most recent quarter as having “broad-based” earnings growth. He was anticipating a favorable response from the market despite the fact that the market has already demonstrated remarkable strength thus far in 2023. On Monday, shares of GE Company reached a new 52-week intraday high. And going into trading on Tuesday, the share price had increased by around 53% so far this year. The Dow has only gained roughly 2% overall.
The aircraft industry is continuing to recover from the lows caused by the Covid-19 epidemic, which is one reason why GE stock has been on the rise in 2023. Both Boeing (NYSE:BA) and Airbus (AIR.France) are trying to supply more planes to meet increased demand, and GE is a big supplier of aircraft engines for both companies. However, problems with the supply chain might be a headwind for GE and the industry as a whole. As a result of increased manufacturing, the whole supply chain for aerospace products is currently experiencing difficulties due to a scarcity of parts.
Regardless of any challenges that may arise with the supply chain, General Electric still plans to manufacture 1,700 LEAP engines in 2023. This represents an increase of around 50% year over year. These engines provide propulsion for airplanes in the series of A320 as well as the Boeing 737 MAX. That is yet another bright spot from the previous three months.
In the 50/50 joint venture that it has with Safran (SAF.France), GE manufactures LEAP engines.
Other major industrial companies such as Dow, General Motors (NYSE:GM), and 3M (NYSE:MMM) will also release their earnings on Tuesday. The Dow and GM indexes are both moving lower, while the stock of 3M is moving higher. Every single one of them exceeded the earnings forecasts provided by Wall Street.
Featured Image: Megapixl
Author Shariq Khan 
