GE Boosts FY23 Outlook As Q2 Results Top Estimates

Industrial conglomerate General Electric Co. (GE) reported Tuesday a net loss for the second quarter that sharply narrowed from last year, driven by improved profit margins and 18 percent revenue growth. Adjusted earnings per share and quarterly revenues topped analysts’ expectations. The company also raised its outlook for the full-year 2023.

In pre-market activity on the NYSE, GE shares are trading at $114.82, up $4.57 or 4.15 percent.

GE Chairman and CEO Lawrence Culp, Jr. said, “GE’s second-quarter performance was strong, building on our first-quarter momentum and marking a solid first half of the year. Orders and revenue grew double digits, led by robust services growth across our portfolio, increased demand at GE Aerospace and record Renewable Energy orders.”

For the second quarter, GE reported a net loss attributable to common shareowners of $0.02 per share, sharply narrower than $0.86 per share in the prior-year quarter.

Earnings from continuing operations attributable to common shareowners was $996 million or $0.91 per share, compared to a loss from continuing operations of $1.20 billion or $1.09 per share in the year-ago quarter.

Excluding items, adjusted earnings per share for the quarter were $0.68, compared to last year’s $0.36. On average, 16 analysts polled by Thomson Reuters expected the company to report earnings of $0.46 per share for the quarter. Analysts’ estimates typically exclude special items.

Total revenues for the quarter grew 18 percent to $16.70 billion from $14.13 billion in the same quarter last year. Analysts expected revenues of $15.00 billion for the quarter. Organic revenue was up 19 percent.

Total orders for the quarter surged 59 percent to $22.0 billion and increased 58 percent organically.

Profit margin for the quarter improved 1,510 basis points to 8.3 percent.

GE Aerospace revenues improved 28 percent to $7.86 billion on a reported and organic basis, with equipment growing at double the rate of services. Orders of $9.45 billion increased 37 percent.

Revenues from Renewable Energy, part of GE Vemova, grew 24 percent to $3.85 billion and up 27 percent organically, with Offshore Wind revenues more than doubling year-over-year. Orders of $8.29 billion nearly tripled.

Revenues from Power, part of GE Vemova, were down 1 percent to $4.15 billion from last year. Orders of $4.35 billion increased 7 percent.

Looking ahead to fiscal 2023, the company now projects adjusted earnings in a range of $2.10 to $2.30 per share on organic revenue growth in the low-double-digit range. Previously, the company expected adjusted earnings in the range of $1.70 to $2.00 per share on organic revenue growth in the high-single-digit range.

The Street is currently looking for earnings of $2.06 per share on a revenue decline of 18.6 percent to $62.29 billion for the year.

The company also said it is looking set to deliver between $4.1 billion and $4.6 billion of free cash flow in 2023, up from the prior forecast between $3.6 billion and $4.2 billion.

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