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General Electric (GE) Units Secure Turbines & Services Contract

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General Electric Company’s (GE - Free Report) unit, GE Renewable Energy, yesterday announced to have received a contract to supply onshore wind turbines in Oklahoma. Additionally, the company got a maintenance services contract from Reliance Bangladesh LNG & Power Ltd.

The financial terms of the contracts were not disclosed.

It is worth noting here that General Electric’s share price edged down 1.3% yesterday, eventually closing the trading session at $13.13.

Inside the Headlines

As noted, GE Renewable Energy will supply 492 units of 2.X-127s and 39 units of 2.X-116 wind turbines. The turbines will be used for Oklahoma-based 1485-megawatt (MW) North Central Wind Energy Facilities.

Notably, the 1485-MW wind energy facilities comprise the 287-MW Maverick Wind Energy Center, the 999-MW Traverse Wind Energy Center and the 199-MW Sundance Wind Energy Center. The completion of Sundance and Maverick facilities is anticipated in 2021, while that of Traverse is expected in 2022. The facilities are being developed by sustainable energy solutions provider, Invenergy. It is worth noting here that the contract strengthened GE Renewable Energy’s existing position in Oklahoma.

Renewable Energy provides offshore wind turbines, high-voltage equipment, blades for wind turbines (onshore and offshore), and other products and services. Its orders in the fourth quarter of 2020 increased 34% year over year or grew 32% organically.

Regarding the second contract, the company, through GE Power, will engage in providing digital solutions and maintenance services at 718-MW combined cycle power plant to come up in Narayanganj, Bangladesh. The plant’s owner Reliance Bangladesh LNG & Power Ltd is a joint venture between Reliance Power Limited of India and JERA Co., Inc. of Japan.

The services contract is applicable for the coming 22 years.

GE Power produces steam and gas turbines, power generation services, and generators. The Power segment includes Gas Power and Power Portfolio. In the fourth quarter, the segment’s orders increased 26% year over year or expanded 27% organically.

Zacks Rank, Price Performance and Estimate Trend

General Electric currently has a market capitalization of $116.8 billion and a Zacks Rank #3 (Hold). The company is poised to benefit from its healthy liquidity position, actions to restructure its portfolio and solid contract wins. However, the pandemic-led challenges are worrying.

In the past three months, General Electric’s share price has increased 25.4% as compared with 8.8% growth recorded by the industry.

In the past 60 days, General Electric’s bottom-line estimates for 2021 and 2022 have been revised downward. Currently, the Zacks Consensus Estimate for earnings is pegged at 24 cents for 2021 and 52 cents for 2022, suggesting declines of 14.3% and 3.7% from the respective 60-day-ago figures.

General Electric Company Price and Consensus


General Electric Company Price and Consensus

General Electric Company price-consensus-chart | General Electric Company Quote

Stocks to Consider

Some better-ranked stocks in the industry are Crane Co. (CR - Free Report) , Danaher Corporation (DHR - Free Report) and Griffon Corporation (GFF - Free Report) . All these companies presently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the past 60 days, earnings estimates for Crane and Griffon have improved for the current year and have been stable for Danaher. Further, earnings surprise for the last four quarters, on average, was 12.37% for Crane, 19.86% for Danaher and 115.48% for Griffon.

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