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General Electric (GE) Prices Tender Offers, Gets MSC Contract

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General Electric Company (GE - Free Report) floated tender offers to purchase $23 billion worth of U.S. dollar-denominated debt securities for cash. The securities to be purchased are issued by General Electric or its affiliates and the same has been guaranteed by the company.

The actions will help General Electric to lower its debt position.

In a separate release, General Electric's unit GE Power Conversion has secured a maintenance services contract from the U.S. Navy Military Sealift Command ("MSC"). The contract is expected to be valid for five years and worth approximately $125 million.

Notably, General Electric's shares declined 1.8% yesterday, ending the trading session at $107.00.

Inside the Headlines

As noted, the tender offer is valid for three pools of securities, with an aggregate principal amount of $7 billion, $7.5 billion and $8.5 billion. The principal amount of the securities in the three pools is either $1,000, €1,000, or £1,000.

The $7-billion pool comprises U.S. dollar, Euro and Pound-denominated debt securities. The maturity dates of the securities are between January 2022 and May 2026.

The $7.5-billion pool consists of securities with denominations in U.S. dollar, Euro and Pound. The maturity dates for the pool are between February 2027 and August 2036.

The $8.5-billion pool has securities in all three currencies mentioned above. The maturity dates for this pool vary from May 2037 to May 2050.

The early payment date for each tender offer is set at Dec 1, 2021, and the expiration date is Dec 9, 2021. The final payment date for each offer is Dec 14, 2021. The company's securities purchased, per the tender offerings, will be retired and canceled.

The tender offering is pursuant to General Electric's plan to lower its debts. General Electric plans gross reduction > $75 billion in debts since 2018. Exiting third-quarter 2021, the company's borrowings were $57.4 billion, down 3% from $59.2 billion at the end of the second quarter.

Regarding the MSC's indefinite-quantity and delivery contract, GE Power Conversion will be required to provide services for the maintenance of propulsion systems and power (electric and hybrid electric) systems of the former's 35 vessels. The scope of the works involved includes remote technical support, modernization, upgrades, maintenance, repairs, training, parts, and program management.

In addition, services related to the management of hardware and software configuration, shipyard maintenance, and cybersecurity services support will be provided by GE Power Conversion.

Zacks Rank, Share Price Performance and Earnings Estimates

General Electric currently has a market capitalization of $119.7 billion and a Zacks Rank #3 (Hold). Solid liquidity position, portfolio-restructuring measures and actions to lower debts are expected to aid General Electric in the quarters ahead. However, adverse impacts of the supply-chain constraints are concerning for the company.

In the past three months, General Electric's shares have gained 2% against the industry's decline of 7.7%.

 

Zacks Investment ResearchImage Source: Zacks Investment Research

 

In the past 30 days, the Zacks Consensus Estimate for General Electric's earnings is pegged at 82 cents for the fourth quarter of 2021, reflecting a decline of 12.8% from the 30-day-ago figure. Notably, earnings estimates are pegged at $1.98 for 2021 and $3.90 for 2022, reflecting an increase of 3.7% and a decline of 0.8% from the respective 30-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

Better-Ranked Stocks

Below we discuss three companies, with better ranks, in the industry.

Carlisle Companies Incorporated (CSL - Free Report) presently carries a Zacks Rank #2 (Buy). Its earnings surprise in the last reported quarter was 9.52% and that for the last four quarters was 38.89%, on average.

You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

In the past 30 days, Carlisle Companies' earnings estimates have increased 1.1% for 2021 and decreased 0.4% for 2022. Its shares gained 13.8% in the past three months.

Crane Co. (CR - Free Report) reported better-than-expected results in the last reported quarter, with earnings surpassing estimates by 37.96%. Its earnings surprise for the last four quarters is 22.02%, on average. The company presently carries a Zacks Rank #2.

Crane's earnings estimates increased 5.9% for 2021 and 4.7% for 2022 in the past 30 days. Its shares grew 4.4% in the past three months.

LSB Industries, Inc.'s (LXU - Free Report) results for the last reported quarter were impressive, with earnings surpassing estimates by 125.00%. Its last four quarters average earnings surprise was 15.86%.

LSB Industries' loss estimates for 2021 worsened in the past 30 days, while earnings estimates for 2022 have increased by 68.6%. Its shares have gained 33.2% in the past three months.