Back to top

ETFs in Focus Post General Electric Q2 Earnings

Read MoreHide Full Article

General Electric (GE - Free Report) , a giant in the U.S. industrials sector, released its second-quarter 2017 earnings on July 21, 2017. The company’s oil and gas division witnessed a decline in revenues primarily due to volatile oil prices. Moreover, uncertainty around President Donald Trump’s pro-growth policies has created a cloud over the outlook on the industrial sector.


Q2 Results in Focus


Shares of General Electric Company declined more than 3.1% at market close on July 21, 2017, despite beating the Zacks Consensus Estimate on both earnings and revenues (read: US Trade Deficit Declines in May: ETFs in Focus).


The company’s revenues decreased 11.75% in second-quarter 2017 on a year-over–year basis. However, revenues increased 6.86% on a sequential basis. Revenues of $29.558 billion came ahead of the consensus mark of $29.123 billion.


General Electric reported non-GAAP earnings per share (EPS) of $0.28 for second-quarter 2017, down 45% year over year but up 33.33% on a sequential basis. It came ahead of the Zacks Consensus Estimate of $0.25. Moreover, GE continues to expect its full-year 2017 EPS to be in the range of $1.60–$1.70, but stated that the company is trending towards the bottom end of the guidance.


The company reported earnings from continuing operations attributable to GE common shareowners of $1.338 billion, down from $3.300 billion a year ago. Second-quarter 2017 orders increased 6% to $28.3 billion, from $26.6 billion a year ago. Moreover, GE’s backlog increased 2% to $326.8 billion from $319.6 billion a year ago.


Revenue Performance


Industrial segment revenues decreased to $28.047 billion from $28.630 billion in the year-ago quarter.


Power revenues increased to $6.969 billion from $6.639 billion in the year-ago quarter.


Renewable Energy revenues increased to $2.457 billion from $2.094 billion in the year-ago quarter.


Oil & Gas revenues decreased to $3.108 billion from $3.219 billion in the year-ago quarter.


Aviation revenues increased to $6.532 billion from $6.511 billion in the year-ago quarter.


Healthcare revenue increased to $4.700 billion from $4.525 billion in the year-ago quarter.


Transportation revenues decreased to $1.071 billion from $1.240 billion in the year-ago quarter.


Energy Connections & Lighting revenues decreased to $3.210 billion from $4.401 billion in the year-ago quarter.


Performance of General Electric has been dismal so far this year, as it is down 19.53% year to date (as of July 24, 2017).


In the current scenario, we believe it is prudent to discuss the following ETFs that have a relatively high exposure to General Electric (see all Industrial ETFs here).


Industrial Select Sector SPDR Fund (XLI - Free Report)


This fund focuses on providing exposure to the U.S. industrial sector. It has AUM of $10.91 billion and charges a fee of 14 basis points a year. It has a 7.80% allocation to General Electric (as of June 30, 2017). The fund has returned 17.40% in the last one year and 10.30% year to date (as of July 24, 2017). It closed 0.51% higher on Friday, July 21, 2017. XLI currently has a Zacks ETF Rank of #3 (Hold) with a Medium risk outlook (read: Bet on Sector ETFs with Strong Beat Ratios).


Vanguard Industrials ETF (VIS - Free Report)


This ETF is a pure play on the U.S. industrials sector. It has AUM of $3.2 billion and charges a fee of 10 basis points a year. It has a 8.6% allocation to General Electric (as of June 30, 2017). The fund has returned 16.38% in the last one year and 8.41% year to date (as of July 24, 2017). It closed 0.41% higher on Friday, July 21, 2017. VIS currently has a Zacks ETF Rank of #3 with a Medium risk outlook.


iShares U.S. Industrials ETF (IYJ - Free Report)


This ETF is a relatively costly bet on the U.S. industrial sector. It has AUM of $1.05 billion and charges a fee of 44 basis points a year. It has a 7.40% allocation to General Electric (as of July 21, 2017). The fund has returned 16.48% in the last one year and 10.52% year to date (as of July 24, 2017). It closed 0.47% higher on Friday, July 21, 2017. IYJ currently has a Zacks ETF Rank of #3 with a Medium risk outlook.


Below is a year to date performance comparison of the funds and General Electric.


 
Source: Yahoo Finance


Want key ETF info delivered straight to your inbox?

Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>
    





 




In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


General Electric Company (GE) - free report >>

VIPERS-INDUS (VIS) - free report >>

SPDR-INDU SELS (XLI) - free report >>

ISHARS-US INDU (IYJ) - free report >>


More from Zacks ETF News And Commentary

You May Like