General Electric Company (GE - Free Report) signed a memorandum of understanding (non-binding) to divest certain operations of its nuclear activities to France-based Électricité de France S.A. (or the EDF Group). The to-be-divested business is presently part of GE Steam Power. The financial terms of the transaction have been kept under wraps.
Shares of General Electric lost 2.4% in the last two trading days. It ended the trading session at $96.83 on Feb 11.
The EDF Group plays a vital role in the energy transition. Its focus on nuclear power renewable energy and desire to use new technologies is commendable. Generation, transmission and distribution of electricity are all done by the EDF Group. It also provides energy services.
Inside the Headlines
As noted by General Electric, the to-be-divested business includes Steam Power’s conventional island equipment meant for use in new nuclear power plants. Steam turbine technology for future plants is also considered for the divestiture.
The company will reclassify the above-mentioned businesses as “held for sale” in first-quarter 2022. Some other parts of GE Steam Power, including GE Hitachi Nuclear Energy and service-focused businesses, will be retained by General Electric.
A pretax impairment charge (non-cash) of $700-$800 million related to the transaction will be booked by General Electric. The company also expects to record significant gain upon the transaction completion, expected in the first half of 2023.
It is worth noting here that Steam Power’s revenues totaled $3,241 million in 2021, decreasing 8.9% year over year. It accounted for 19.2% of General Electric’s total segment revenues in 2021.
Zacks Rank, Estimate Trend and Price Performance
With a market capitalization of $106.3 billion, General Electric currently carries a Zacks Rank #5 (Strong Sell). Cost inflation and supply-chain woes, as well as unfavorable movements in foreign currencies, are worrying for the company. Its efforts to restructure its portfolio and strengthen digital businesses are tailwinds.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past three months, the company’s shares have lost 9.3% compared with the industry’s decline of 11.5%.
Meanwhile, the Zacks Consensus Estimate for General Electric’s earnings has decreased 32.8% to 41 cents per share for the first quarter of 2022. Likewise, its earnings estimates decreased 11.9% to $3.54 for 2022 and declined 6.6% to $5.24 for 2023 in the past 60 days.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
General Electric Company (GE - Free Report) signed a memorandum of understanding (non-binding) to divest certain operations of its nuclear activities to France-based Électricité de France S.A. (or the EDF Group). The to-be-divested business is presently part of GE Steam Power. The financial terms of the transaction have been kept under wraps.
Shares of General Electric lost 2.4% in the last two trading days. It ended the trading session at $96.83 on Feb 11.
The EDF Group plays a vital role in the energy transition. Its focus on nuclear power renewable energy and desire to use new technologies is commendable. Generation, transmission and distribution of electricity are all done by the EDF Group. It also provides energy services.
Inside the Headlines
As noted by General Electric, the to-be-divested business includes Steam Power’s conventional island equipment meant for use in new nuclear power plants. Steam turbine technology for future plants is also considered for the divestiture.
The company will reclassify the above-mentioned businesses as “held for sale” in first-quarter 2022. Some other parts of GE Steam Power, including GE Hitachi Nuclear Energy and service-focused businesses, will be retained by General Electric.
A pretax impairment charge (non-cash) of $700-$800 million related to the transaction will be booked by General Electric. The company also expects to record significant gain upon the transaction completion, expected in the first half of 2023.
It is worth noting here that Steam Power’s revenues totaled $3,241 million in 2021, decreasing 8.9% year over year. It accounted for 19.2% of General Electric’s total segment revenues in 2021.
Zacks Rank, Estimate Trend and Price Performance
With a market capitalization of $106.3 billion, General Electric currently carries a Zacks Rank #5 (Strong Sell). Cost inflation and supply-chain woes, as well as unfavorable movements in foreign currencies, are worrying for the company. Its efforts to restructure its portfolio and strengthen digital businesses are tailwinds.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past three months, the company’s shares have lost 9.3% compared with the industry’s decline of 11.5%.
Meanwhile, the Zacks Consensus Estimate for General Electric’s earnings has decreased 32.8% to 41 cents per share for the first quarter of 2022. Likewise, its earnings estimates decreased 11.9% to $3.54 for 2022 and declined 6.6% to $5.24 for 2023 in the past 60 days.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Get the latest research report on GE - FREE
Get the latest research report on HON - FREE
Get the latest research report on DHR - FREE
Get the latest research report on CSL - FREE