General Electric (GE) To Post Q2 Earnings: What To Expect?

General Electric Company (NYSE:GE) is scheduled to report second-quarter 2019 results on Jul 31, 2019, before the market opens.

The company’s financial performance in the last four quarters was mixed, having recorded better-than-expected results twice and lagging estimates in the other two. The company’s average earnings surprise was positive 5.56%. In the last reported quarter, its earnings of 14 cents surpassed the Zacks Consensus Estimate of 9 cents by 55.56%.

In the past three months, the industrial conglomerate’s shares have gained 3.4% against the industry’s decline of 1.1%.

Let us see how things are shaping up for General Electric this quarter.

Factors Influencing GE’s Performance

Of six segments of General Electric, we believe that results of the Power segment will play a vital role in its overall performance in the second quarter. Once an important growth driver, the segment seems to have lost zeal due to internal and external challenges. For the second quarter of 2019, the Zacks Consensus Estimate for the Power segment’s revenues is pegged at $5,632 million, suggesting a 0.5% decline from the previous quarter’s reported figure and 25.7% decrease from the year-ago quarter’s number.

It is worth noting here that the company has reorganized Power businesses to revive the ailing segment. A look at the segment’s annual projection might give a fair idea about the to-be-reported quarter’s results. For 2019, the company expects Power’s organic revenues to decline in a high-single digit. The margin for the same is likely to be positive.

The Aviation segment might gain from the rising popularity of LEAP engines, with more than 1,800 likely to be shipped in 2019. The Zacks Consensus Estimate for the Aviation segment’s revenues in the second quarter is pegged at $8,171 million, roughly 2.7% above the previous quarter’s reported figure and above 8.7% from the year-ago quarter’s number. For 2019, the company anticipates organic sales to increase in a high-single digit on strengthening services and military businesses. Margin is predicted to be roughly 20%.

In addition, healthy performances of Renewable Energy and Healthcare segments might be beneficial. For 2019, Renewable Energy’s organic revenues are predicted to increase in double-digits while that of Healthcare is likely to grow in a mid-single digit.

Further, the company’s results might benefit from the focus on expanding commercially in emerging markets, launch of the digital business and efforts to reduce leverage. The Zacks Consensus Estimate for the Industrial segment’s revenues in the to-be-reported quarter is currently pegged at $27,179 million, suggesting growth of 6.5% from the previous quarter’s reported figure and a 5.2% decline from the year-ago quarter’s number. Profits for the Industrial segment are likely to be $2,600 million, up 3.1% from the previous quarter’s reported figure and down 17.6% from the year-ago quarter’s number.

Also, the company is working diligently to reduce its exposure in the GE Capital business. It is worth noting here that asset disposition in GE Capital amounted to approximately $1.1 billion in the first quarter of 2019. The Zacks Consensus Estimate for GE Capital’s sales in the second quarter is pegged at $2,151 million, suggesting a decline from $2,429 million reported in the year-ago quarter.

Earnings Whispers

Our proven model provides some idea about stocks that are about to release their earnings results. Per the model, a stock needs a combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for a likely earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The case with General Electric has been provided below.

Earnings ESP: The company has an Earnings ESP of 0.00%, as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 12 cents.

General Electric Company Price, Consensus and EPS Surprise