General Electric Company (GE - Free Report) reported impressive second-quarter 2022 results. GE’s earnings surpassed the Zacks Consensus Estimate by 105.3%. Sales beat in the quarter was 3.6%.
The industrial conglomerate’s adjusted earnings were 78 cents per share in the second quarter, beating the Zacks Consensus Estimate of 38 cents. The bottom line increased 95% from the year-ago quarter’s figure of 40 cents primarily on sales growth.
Revenue Details
In the quarter under review, General Electric’s consolidated revenues were $18,646 million, reflecting a year-over-year increase of 2%. The results were driven by a gain in the Healthcare and Aerospace segments’ performances, partially offset by a weakness in the Power and Renewable Energy segments.
GE’s top line surpassed the Zacks Consensus Estimate of $18,001 million.
The performance of Aerospace, Healthcare, Renewable Energy and Power is discussed below:
Aerospace revenues increased 27% year over year to $6,127 million and orders grew 26%. Organically, growth rates for revenues and orders were 27% and 26%, respectively. The high volume of shop visits significantly benefited Commercial Services revenues, partially offset by a decline in Commercial Engines revenues due to supply-chain constraints.
Healthcare revenues in the reported quarter totaled $4,519 million, increasing 1% year over year. The segment’s orders grew 1% on an organic basis. The segment gained from a 5% increase in services organic sales while equipment revenues declined slightly. Tailwind in imaging, ultrasound, and healthcare systems services aided the results. However, supply shortages and the COVID-19 impact were spoilsports in the quarter.
Renewable Energy revenues totaled $3,099 million, down 23% year over year. Organically, the segment’s sales were down 20%. Its orders decreased 3% in the reported quarter. Softness in Onshore Wind revenues adversely impacted the segment’s performance. Growth in services revenues was a relief.
The Power segment’s revenues were down 2% year over year to $4,202 million. Organically, sales increased 4%. However, the segment’s orders decreased 16% year over year (or down 13% organically). The segment suffered lower shipment volumes.
Margin Profile
In the quarter under review, General Electric’s cost of sales was down 2.8% year over year to $13,244 million. It represented 71% of the quarter’s revenues compared with 74.6% in the year-ago quarter. Selling, general and administrative expenses decreased 5% to $2,720 million. The same was 14.6% of the quarter’s revenues compared with 15.7% in the year-ago quarter. Research and development expenses totaled $696 million, reflecting an increase of 15.2%. The metric represented 3.7% of the quarter’s revenues compared with 3.3% in the year-ago quarter.
General Electric’s adjusted operating profit was $1,663 million, up 81% year over year. Margin in the quarter was 9.3%, up 400 basis points (bps).
On a reported basis, the Power segment recorded operating earnings of $320 million compared with $299 million in the year-ago quarter. Renewable Energy recorded a loss of $419 million compared with a loss of $99 million in second-quarter 2021. The Aerospace segment’s earnings were $1,148 million compared with $176 million in the year-ago quarter. The Healthcare segment’s profits decreased 18.7% to $651 million.
Interest and other financial charges decreased 19.7% year over year to $379 million.
Balance Sheet and Cash Flow
Exiting the second quarter of 2022, General Electric had cash and cash equivalents of $13.2 billion, up from $12.8 billion recorded at the end of the previous quarter. Borrowings were $32.5 billion, up from $28.6 billion at the end of the previous quarter.
Non-GAAP free cash outflow totaled $718 million in the first six months compared with $3,162 million cash outflow recorded in the year-ago period.
Zacks Rank & Stocks to Consider
GE currently carries a Zacks Rank #4 (Sell).
Some better-ranked companies are discussed below.
Griffon Corporation (GFF - Free Report) presently sports a Zacks Rank #1 (Strong Buy). GFF’s earnings surprise in the last four quarters was 97%, on average. You can see the complete list of today’s Zacks #1 Rank stocks.
In the past 60 days, Griffon’s earnings estimates have increased 28.9% for fiscal 2022 (ending September 2022). The stock has rallied 25.5% in the past six months.
Greif, Inc. (GEF - Free Report) presently sports a Zacks Rank of 1. GEF delivered a trailing four-quarter earnings surprise of 22.9%, on average.
GEF’s earnings estimates have increased 17.8% for fiscal 2022 (ending October 2022) in the past 60 days. Its shares have risen 18.5% in the past six months.
Titan International, Inc. presently flaunts a Zacks Rank of 1. Its earnings surprise in the last four quarters was 56.4%, on average.
In the past 60 days, TWI’s earnings estimates have increased 43.3% for 2022. The stock has surged 64.9% in the past six months.
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General Electric Company (GE - Free Report) reported impressive second-quarter 2022 results. GE’s earnings surpassed the Zacks Consensus Estimate by 105.3%. Sales beat in the quarter was 3.6%.
The industrial conglomerate’s adjusted earnings were 78 cents per share in the second quarter, beating the Zacks Consensus Estimate of 38 cents. The bottom line increased 95% from the year-ago quarter’s figure of 40 cents primarily on sales growth.
Revenue Details
In the quarter under review, General Electric’s consolidated revenues were $18,646 million, reflecting a year-over-year increase of 2%. The results were driven by a gain in the Healthcare and Aerospace segments’ performances, partially offset by a weakness in the Power and Renewable Energy segments.
GE’s top line surpassed the Zacks Consensus Estimate of $18,001 million.
The performance of Aerospace, Healthcare, Renewable Energy and Power is discussed below:
Aerospace revenues increased 27% year over year to $6,127 million and orders grew 26%. Organically, growth rates for revenues and orders were 27% and 26%, respectively. The high volume of shop visits significantly benefited Commercial Services revenues, partially offset by a decline in Commercial Engines revenues due to supply-chain constraints.
Healthcare revenues in the reported quarter totaled $4,519 million, increasing 1% year over year. The segment’s orders grew 1% on an organic basis. The segment gained from a 5% increase in services organic sales while equipment revenues declined slightly. Tailwind in imaging, ultrasound, and healthcare systems services aided the results. However, supply shortages and the COVID-19 impact were spoilsports in the quarter.
Renewable Energy revenues totaled $3,099 million, down 23% year over year. Organically, the segment’s sales were down 20%. Its orders decreased 3% in the reported quarter. Softness in Onshore Wind revenues adversely impacted the segment’s performance. Growth in services revenues was a relief.
The Power segment’s revenues were down 2% year over year to $4,202 million. Organically, sales increased 4%. However, the segment’s orders decreased 16% year over year (or down 13% organically). The segment suffered lower shipment volumes.
Margin Profile
In the quarter under review, General Electric’s cost of sales was down 2.8% year over year to $13,244 million. It represented 71% of the quarter’s revenues compared with 74.6% in the year-ago quarter. Selling, general and administrative expenses decreased 5% to $2,720 million. The same was 14.6% of the quarter’s revenues compared with 15.7% in the year-ago quarter. Research and development expenses totaled $696 million, reflecting an increase of 15.2%. The metric represented 3.7% of the quarter’s revenues compared with 3.3% in the year-ago quarter.
General Electric’s adjusted operating profit was $1,663 million, up 81% year over year. Margin in the quarter was 9.3%, up 400 basis points (bps).
On a reported basis, the Power segment recorded operating earnings of $320 million compared with $299 million in the year-ago quarter. Renewable Energy recorded a loss of $419 million compared with a loss of $99 million in second-quarter 2021. The Aerospace segment’s earnings were $1,148 million compared with $176 million in the year-ago quarter. The Healthcare segment’s profits decreased 18.7% to $651 million.
Interest and other financial charges decreased 19.7% year over year to $379 million.
Balance Sheet and Cash Flow
Exiting the second quarter of 2022, General Electric had cash and cash equivalents of $13.2 billion, up from $12.8 billion recorded at the end of the previous quarter. Borrowings were $32.5 billion, up from $28.6 billion at the end of the previous quarter.
Non-GAAP free cash outflow totaled $718 million in the first six months compared with $3,162 million cash outflow recorded in the year-ago period.
Zacks Rank & Stocks to Consider
GE currently carries a Zacks Rank #4 (Sell).
Some better-ranked companies are discussed below.
Griffon Corporation (GFF - Free Report) presently sports a Zacks Rank #1 (Strong Buy). GFF’s earnings surprise in the last four quarters was 97%, on average. You can see the complete list of today’s Zacks #1 Rank stocks.
In the past 60 days, Griffon’s earnings estimates have increased 28.9% for fiscal 2022 (ending September 2022). The stock has rallied 25.5% in the past six months.
Greif, Inc. (GEF - Free Report) presently sports a Zacks Rank of 1. GEF delivered a trailing four-quarter earnings surprise of 22.9%, on average.
GEF’s earnings estimates have increased 17.8% for fiscal 2022 (ending October 2022) in the past 60 days. Its shares have risen 18.5% in the past six months.
Titan International, Inc. presently flaunts a Zacks Rank of 1. Its earnings surprise in the last four quarters was 56.4%, on average.
In the past 60 days, TWI’s earnings estimates have increased 43.3% for 2022. The stock has surged 64.9% in the past six months.
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 >>
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