We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
GE to Report Q4 Earnings: Will Power Segment Issues Hurt?
Read MoreHide Full Article
General Electric Company (GE - Free Report) is scheduled to report fourth-quarter 2018 results on Jan 31, 2019, before the market opens.
The Power segment — engaged in the production of gas, steam and aero derivative turbines; generators; and combined cycle systems — accounted for 20.1% of Industrial revenues in the third quarter. Apart from the Power segment, the Industrial segment results include that of six other segments.
Once a major growth driver, the Power segment is currently grappling with difficult macroeconomic conditions.
Segment’s Q4 Performance, Estimates
In the third quarter of 2018, the Power segment’s revenues declined 33% year over year to $5,739 million. Orders were weak, down 18%, and backlog fell 5.8% to $93.7 billion. Also, its profit margin dipped by 16.4 percentage points. This segment’s dismal performance has been one of the prime reasons for General Electric’s poor third-quarter results.
It is worth mentioning here that the Power segment’s third-quarter revenues lagged the Zacks Consensus Estimate of $5,969 million by 3.86%. Its average sales surprise for the last four quarters was a positive 4.89%.
General Electric predicts that difficulties related to project execution, operational issues and lower market penetration will pose threat to the Power segment’s performance in the quarters ahead. In addition, geopolitical tensions, growing popularity of renewable energy sources, macroeconomic challenges and overcapacity in the industry are other prevailing headwinds.
For the fourth quarter of 2018, the Zacks Consensus Estimate for revenues for the Power segment is pegged at $6,711 million, below $9,421 million generated in the year-ago quarter. Conversely, the segment is predicted to report operating loss of $345 million compared with operating earnings of $260 million recorded in the year-ago quarter.
Overall Q4 Expectations
The Zacks Consensus Estimate for revenues of the Industrial segment in the to-be-reported quarter is currently pegged at $30,987 million, reflecting decline of 3.8% from the previous year’s figure of $32,214 million. Profit for the Industrial segment is likely to decrease 10.9% year over year to $3,156 million. (Read more: General Electric to Post Q4 Earnings: What’s in Store?)
Moving Ahead
In June 2018, General Electric announced plans about restructuring the business portfolio in a bid to become a high-tech industrial company focused on Aviation, Power and Renewable Energy.
Also, the company’s CEO, H. Lawrence Culp Jr. chalked out a reorganization plan for the ailing Power segment in October 2018. The segment’s businesses will likely be split into two. The first will comprise of gas product and services groups, and the second will include steam, grid solutions, power conversion and nuclear businesses.
Other stocks in the industry, which are likely to soon report their October-December quarter results soon, are Honeywell International Inc. (HON - Free Report) , Carlisle Companies Incorporated (CSL - Free Report) and Griffon Corporation (GFF - Free Report) . While Honeywell International will report numbers on Feb 1, Carlisle Companies will post results on Feb 7 and Griffon on Jan 30.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
GE to Report Q4 Earnings: Will Power Segment Issues Hurt?
General Electric Company (GE - Free Report) is scheduled to report fourth-quarter 2018 results on Jan 31, 2019, before the market opens.
The Power segment — engaged in the production of gas, steam and aero derivative turbines; generators; and combined cycle systems — accounted for 20.1% of Industrial revenues in the third quarter. Apart from the Power segment, the Industrial segment results include that of six other segments.
Once a major growth driver, the Power segment is currently grappling with difficult macroeconomic conditions.
Segment’s Q4 Performance, Estimates
In the third quarter of 2018, the Power segment’s revenues declined 33% year over year to $5,739 million. Orders were weak, down 18%, and backlog fell 5.8% to $93.7 billion. Also, its profit margin dipped by 16.4 percentage points. This segment’s dismal performance has been one of the prime reasons for General Electric’s poor third-quarter results.
It is worth mentioning here that the Power segment’s third-quarter revenues lagged the Zacks Consensus Estimate of $5,969 million by 3.86%. Its average sales surprise for the last four quarters was a positive 4.89%.
General Electric predicts that difficulties related to project execution, operational issues and lower market penetration will pose threat to the Power segment’s performance in the quarters ahead. In addition, geopolitical tensions, growing popularity of renewable energy sources, macroeconomic challenges and overcapacity in the industry are other prevailing headwinds.
For the fourth quarter of 2018, the Zacks Consensus Estimate for revenues for the Power segment is pegged at $6,711 million, below $9,421 million generated in the year-ago quarter. Conversely, the segment is predicted to report operating loss of $345 million compared with operating earnings of $260 million recorded in the year-ago quarter.
Overall Q4 Expectations
The Zacks Consensus Estimate for revenues of the Industrial segment in the to-be-reported quarter is currently pegged at $30,987 million, reflecting decline of 3.8% from the previous year’s figure of $32,214 million. Profit for the Industrial segment is likely to decrease 10.9% year over year to $3,156 million. (Read more: General Electric to Post Q4 Earnings: What’s in Store?)
Moving Ahead
In June 2018, General Electric announced plans about restructuring the business portfolio in a bid to become a high-tech industrial company focused on Aviation, Power and Renewable Energy.
Also, the company’s CEO, H. Lawrence Culp Jr. chalked out a reorganization plan for the ailing Power segment in October 2018. The segment’s businesses will likely be split into two. The first will comprise of gas product and services groups, and the second will include steam, grid solutions, power conversion and nuclear businesses.
This plan is likely to bring in some relief to General Electric. This company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other stocks in the industry, which are likely to soon report their October-December quarter results soon, are Honeywell International Inc. (HON - Free Report) , Carlisle Companies Incorporated (CSL - Free Report) and Griffon Corporation (GFF - Free Report) . While Honeywell International will report numbers on Feb 1, Carlisle Companies will post results on Feb 7 and Griffon on Jan 30.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>