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General Electric (GE) Q4 Earnings Top Estimates, Revenues Miss
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General Electric Company (GE - Free Report) reported fourth-quarter 2022 adjusted earnings (excluding 42 cents from non-recurring items) of $1.24 per share, which beat the Zacks Consensus Estimate of $1.11. The bottom line increased 34.8% year over year.
Total revenues of $21,786 million missed the Zacks Consensus Estimate of $21,938 million. The top line increased 7% year over year.
Segmental Discussion
Aerospace revenues jumped 25% year over year to $7,615 million in the reported quarter, driven by growth in commercial services due to a significant increase in shop visits, strong spare part sales and favorable prices. Organic revenues rose 26% year over year. Orders grew 26% year over year. Organic orders also increased by the same amount.
Renewable Energy revenues totaled $3,413 million, down 19% year over year. Organically, the same declined 13%. Results were hurt by lower U.S. onshore wind volumes. Orders increased 4% year over year on a reported basis and 7% organically.
The Power segment’s revenues were up 8% year over year to $5,030 million. Organic revenues increased 12%. Higher aero-derivative unit shipments aided the segment’s performance. Orders climbed 26% on a reported basis and 29% organically.
Healthcare revenues in the reported quarter totaled $4,966 million, up 7% year over year. GE completed the separation of its HealthCare business, launching GE HealthCare on Jan 3, 2023.
General Electric Company Price, Consensus and EPS Surprise
In the quarter under review, General Electric’s cost of sales ascended 7.9% year over year to $15,467 million. Selling, general and administrative expenses increased 10.3% year over year to $3,543 million. Research and development expenses totaled $789 million, reflecting an increase of 11.9%.
General Electric’s adjusted profit was $2,162 million, up 37% year over year. The margin in the quarter was 10.3%, up 220 basis points (bps).
On a reported basis, the Aerospace segment reported a profit of $1,434 million, up 18% year over year. The healthcare segment profit was $804 million, up 6% year over year. The Renewable Energy segment incurred a loss of $454 million compared with a loss of $312 million in the year-ago quarter. The Power segment reported a profit of $692 million.
Balance Sheet and Cash Flow
Exiting the fourth quarter, General Electric had cash, cash equivalents and restricted cash of $17,262 million compared with $15,770 million at the end of December 2021. The company’s long-term borrowings were $28,593 million at the end of the third quarter compared with $30,824 million at the end of December 2021.
Adjusted free cash flow in the reported quarter was $4,286 million, down 15.6% year over year.
General Electric repurchased around 4.2 million shares for $0.3 billion during the fourth quarter.
Outlook
General Electric expects organic revenues to grow in the high-single-digit growth range for 2023 (excludes GE HealthCare). Adjusted earnings are predicted in the band of $1.60-$2.00 per share. The mid-point of the guided range — $1.80 — is short of the Zacks Consensus Estimate of $3.61. GE expects a free cash flow of approximately $3.4-$4.2 billion for the ongoing year.
Zacks Rank & Stocks to Consider
GE currently carries a Zacks Rank #5 (Strong Sell). Some better-ranked companies are discussed below:
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General Electric (GE) Q4 Earnings Top Estimates, Revenues Miss
General Electric Company (GE - Free Report) reported fourth-quarter 2022 adjusted earnings (excluding 42 cents from non-recurring items) of $1.24 per share, which beat the Zacks Consensus Estimate of $1.11. The bottom line increased 34.8% year over year.
Total revenues of $21,786 million missed the Zacks Consensus Estimate of $21,938 million. The top line increased 7% year over year.
Segmental Discussion
Aerospace revenues jumped 25% year over year to $7,615 million in the reported quarter, driven by growth in commercial services due to a significant increase in shop visits, strong spare part sales and favorable prices. Organic revenues rose 26% year over year. Orders grew 26% year over year. Organic orders also increased by the same amount.
Renewable Energy revenues totaled $3,413 million, down 19% year over year. Organically, the same declined 13%. Results were hurt by lower U.S. onshore wind volumes. Orders increased 4% year over year on a reported basis and 7% organically.
The Power segment’s revenues were up 8% year over year to $5,030 million. Organic revenues increased 12%. Higher aero-derivative unit shipments aided the segment’s performance. Orders climbed 26% on a reported basis and 29% organically.
Healthcare revenues in the reported quarter totaled $4,966 million, up 7% year over year. GE completed the separation of its HealthCare business, launching GE HealthCare on Jan 3, 2023.
General Electric Company Price, Consensus and EPS Surprise
General Electric Company price-consensus-eps-surprise-chart | General Electric Company Quote
Margin Profile
In the quarter under review, General Electric’s cost of sales ascended 7.9% year over year to $15,467 million. Selling, general and administrative expenses increased 10.3% year over year to $3,543 million. Research and development expenses totaled $789 million, reflecting an increase of 11.9%.
General Electric’s adjusted profit was $2,162 million, up 37% year over year. The margin in the quarter was 10.3%, up 220 basis points (bps).
On a reported basis, the Aerospace segment reported a profit of $1,434 million, up 18% year over year. The healthcare segment profit was $804 million, up 6% year over year. The Renewable Energy segment incurred a loss of $454 million compared with a loss of $312 million in the year-ago quarter. The Power segment reported a profit of $692 million.
Balance Sheet and Cash Flow
Exiting the fourth quarter, General Electric had cash, cash equivalents and restricted cash of $17,262 million compared with $15,770 million at the end of December 2021. The company’s long-term borrowings were $28,593 million at the end of the third quarter compared with $30,824 million at the end of December 2021.
Adjusted free cash flow in the reported quarter was $4,286 million, down 15.6% year over year.
General Electric repurchased around 4.2 million shares for $0.3 billion during the fourth quarter.
Outlook
General Electric expects organic revenues to grow in the high-single-digit growth range for 2023 (excludes GE HealthCare). Adjusted earnings are predicted in the band of $1.60-$2.00 per share. The mid-point of the guided range — $1.80 — is short of the Zacks Consensus Estimate of $3.61. GE expects a free cash flow of approximately $3.4-$4.2 billion for the ongoing year.
Zacks Rank & Stocks to Consider
GE currently carries a Zacks Rank #5 (Strong Sell). Some better-ranked companies are discussed below:
Allegion plc (ALLE - Free Report) presently carries a Zacks Rank #2 (Buy). ALLE’s earnings surprise in the last four quarters was 8.8%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks.
In the past 60 days, Allegion’s earnings estimates have remained steady for 2022. The stock has gained 8.8% in the past six months.
Valmont Industries, Inc. (VMI - Free Report) presently has a Zacks Rank of 2. VMI’s earnings surprise in the last four quarters was 12.5%, on average.
In the past 60 days, Valmont’s earnings estimates have increased by a penny. The stock has rallied 27.8% in the past six months.
IDEX Corporation (IEX - Free Report) presently has a Zacks Rank of 2. IEX’s earnings surprise in the last four quarters was 5.7%, on average.
In the past 60 days, IDEX’s earnings estimates have increased 0.1% for 2022. The stock has rallied 19.7% in the past six months.