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General Electric (GE) Q1 Earnings and Revenues Top Estimates
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General Electric Company (GE - Free Report) reported first-quarter 2023 adjusted earnings of 27 cents per share, which beat the Zacks Consensus Estimate of 13 cents. The bottom line increased 12.5% year over year.
Total revenues of $14,486 million beat the Zacks Consensus Estimate of $13,395 million. The top line increased 14.3% year over year.
Segmental Discussion
GE started reporting its revenues under two segments effective from the first quarter of 2023, namely GE Aerospace and GE Vernova. The company completed the spin-off of GE HealthCare into an independent publicly traded company, retaining an approximately 19.9% stake in GE HealthCare’s common stock.
Aerospace revenues jumped 25% year over year to $6,981 million in the reported quarter, driven by growth in commercial services and commercial engine revenues. Organic revenues rose 25% year over year. Orders grew 14% year over year. Organic orders also increased by the same amount.
The GE Vernova has two subsegments, namely, Renewable Energy and Power.
The Renewable Energy segment’s revenues totaled $2,837 million, down 1% year over year. Organically, the same increased 5%. Results benefited from higher volume in the grid and offshore wind, partially offset by lower onshore wind deliveries and repower upgrades. Orders increased 92% year over year on a reported basis and 94% organically.
The Power segment’s revenues were up 9% year over year to $3,820 million. Organic revenues increased 11%. Higher transactional and aero-derivative service growth at Gas Power aided its performance. Orders were flat on a reported basis and climbed 1% organically.
General Electric Company Price, Consensus and EPS Surprise
In the quarter under review, General Electric’s cost of sales increased 9.8% year over year to $10,729 million. Selling, general and administrative expenses decreased 21.4% year over year to $2,142 million. Research and development expenses totaled $431 million, reflecting an increase of 6.9%.
General Electric’s adjusted profit was $877 million, up 111.3% year over year. The margin in the quarter was 6.4%, up 290 basis points (bps). On a reported basis, the Aerospace segment reported a profit of $1,326 million, up 46% year over year. The Renewable Energy sub-segment (Part of GE Vernova) incurred a loss of $414 million compared with a loss of $434 million in the year-ago quarter. The Power sub-segment (part of GE Vernova) reported a profit of $75 million, up 19% year over year.
Balance Sheet and Cash Flow
Exiting the first quarter, General Electric had cash, cash equivalents and restricted cash of $12,001 million compared with $15,810 million at the end of December 2022. The company’s long-term borrowings were $20,159 million at the end of the first quarter compared with $20,320 million at the end of December 2022.
Adjusted free cash inflow in the reported quarter was $102 million against free cash outflow of $1,169 million at the end of December 2022.
General Electric repurchased about 3.2 million shares for $0.3 billion during the first quarter.
Outlook
General Electric expects organic revenues to grow in the high-single-digit growth range for 2023. Adjusted earnings are predicted in the band of $1.70-$2.00 per share compared with $1.60-$2.00 per share expected earlier. The mid-point of the guided range — $1.85 — falls short of the Zacks Consensus Estimate of $1.99. GE expects a free cash flow of approximately $3.6-$4.2 billion for the ongoing year compared with $3.4-$4.2 billion expected earlier.
Zacks Rank & Stocks to Consider
GE currently sports a Zacks Rank #1 (Strong Buy). Some other top-ranked companies are discussed below:
ALG’s earnings surprise in the last four quarters was 6.0%, on average. In the past 60 days, estimates for Alamo’s 2023 earnings have increased 7.5%. The stock has gained 19% in the past six months.
Ingersoll Rand Inc. (IR - Free Report) presently sports a Zacks Rank of 1. IR’s earnings surprise in the last four quarters was 8.5%, on average.
In the past 60 days, estimates for Ingersoll Rand’s 2023 earnings have increased 4.5%. The stock has rallied 13.9% in the past six months.
Allegion plc (ALLE - Free Report) presently carries a Zacks Rank #2 (Buy). ALLE’s earnings surprise in the last four quarters was 10.3%, on average.
In the past 60 days, Allegion’s earnings estimates have increased 3.9% for 2023. The stock has gained 6% in the past six months.
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General Electric (GE) Q1 Earnings and Revenues Top Estimates
General Electric Company (GE - Free Report) reported first-quarter 2023 adjusted earnings of 27 cents per share, which beat the Zacks Consensus Estimate of 13 cents. The bottom line increased 12.5% year over year.
Total revenues of $14,486 million beat the Zacks Consensus Estimate of $13,395 million. The top line increased 14.3% year over year.
Segmental Discussion
GE started reporting its revenues under two segments effective from the first quarter of 2023, namely GE Aerospace and GE Vernova. The company completed the spin-off of GE HealthCare into an independent publicly traded company, retaining an approximately 19.9% stake in GE HealthCare’s common stock.
Aerospace revenues jumped 25% year over year to $6,981 million in the reported quarter, driven by growth in commercial services and commercial engine revenues. Organic revenues rose 25% year over year. Orders grew 14% year over year. Organic orders also increased by the same amount.
The GE Vernova has two subsegments, namely, Renewable Energy and Power.
The Renewable Energy segment’s revenues totaled $2,837 million, down 1% year over year. Organically, the same increased 5%. Results benefited from higher volume in the grid and offshore wind, partially offset by lower onshore wind deliveries and repower upgrades. Orders increased 92% year over year on a reported basis and 94% organically.
The Power segment’s revenues were up 9% year over year to $3,820 million. Organic revenues increased 11%. Higher transactional and aero-derivative service growth at Gas Power aided its performance. Orders were flat on a reported basis and climbed 1% organically.
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 increased 9.8% year over year to $10,729 million. Selling, general and administrative expenses decreased 21.4% year over year to $2,142 million. Research and development expenses totaled $431 million, reflecting an increase of 6.9%.
General Electric’s adjusted profit was $877 million, up 111.3% year over year. The margin in the quarter was 6.4%, up 290 basis points (bps). On a reported basis, the Aerospace segment reported a profit of $1,326 million, up 46% year over year. The Renewable Energy sub-segment (Part of GE Vernova) incurred a loss of $414 million compared with a loss of $434 million in the year-ago quarter. The Power sub-segment (part of GE Vernova) reported a profit of $75 million, up 19% year over year.
Balance Sheet and Cash Flow
Exiting the first quarter, General Electric had cash, cash equivalents and restricted cash of $12,001 million compared with $15,810 million at the end of December 2022. The company’s long-term borrowings were $20,159 million at the end of the first quarter compared with $20,320 million at the end of December 2022.
Adjusted free cash inflow in the reported quarter was $102 million against free cash outflow of $1,169 million at the end of December 2022.
General Electric repurchased about 3.2 million shares for $0.3 billion during the first quarter.
Outlook
General Electric expects organic revenues to grow in the high-single-digit growth range for 2023. Adjusted earnings are predicted in the band of $1.70-$2.00 per share compared with $1.60-$2.00 per share expected earlier. The mid-point of the guided range — $1.85 — falls short of the Zacks Consensus Estimate of $1.99. GE expects a free cash flow of approximately $3.6-$4.2 billion for the ongoing year compared with $3.4-$4.2 billion expected earlier.
Zacks Rank & Stocks to Consider
GE currently sports a Zacks Rank #1 (Strong Buy). Some other top-ranked companies are discussed below:
Alamo Group Inc. (ALG - Free Report) presently sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks.
ALG’s earnings surprise in the last four quarters was 6.0%, on average. In the past 60 days, estimates for Alamo’s 2023 earnings have increased 7.5%. The stock has gained 19% in the past six months.
Ingersoll Rand Inc. (IR - Free Report) presently sports a Zacks Rank of 1. IR’s earnings surprise in the last four quarters was 8.5%, on average.
In the past 60 days, estimates for Ingersoll Rand’s 2023 earnings have increased 4.5%. The stock has rallied 13.9% in the past six months.
Allegion plc (ALLE - Free Report) presently carries a Zacks Rank #2 (Buy). ALLE’s earnings surprise in the last four quarters was 10.3%, on average.
In the past 60 days, Allegion’s earnings estimates have increased 3.9% for 2023. The stock has gained 6% in the past six months.