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General Electric's (GE) 9HA Turbines Questioned in Pakistan

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General Electric Company’s (GE - Free Report) leading gas turbines in Pakistan produced power way below the maximum capacity this summer. Several power executives and officials of the country mentioned that the turbines had operational issues like long outages and production delays.

Over the last month, General Electric’s shares lost 5.3%, wider than the 0.5% loss incurred by the industry.

The company is currently plagued by headwinds such as unfavorable fluctuations in currency exchanges, lower demand for locomotives and volatility in oil prices. However, General Electric is undergoing elaborate restructuring moves in order to battle such issues. The company is trimming down cost by lower overhead expenses and conducting certain simplification initiatives. Notably, General Electric has decided to focus on just three core segments — power, aviation and health-care equipment and gradually exit all other businesses, in order to boost its shrinking shares.

Inside the Headlines

Pakistan is currently recognized as a prime growth market for power turbine markers because this booming economy has a well-developed gas infrastructure.

General Electric’s 9HA-Class turbines were installed in Pakistan’s Balloki, Bhikki and Haveli power plants. These efficient turbines are the company’s latest products and have secured place in the Guinness World Records of 2016, on grounds of the amount of electricity produced by the same in Bouchain, France power plant. Moreover, the company’s 7HA and 9HA turbines give tough competition to the ones offered by other companies like Japan's Mitsubishi Hitachi Power Systems.

However, Pakistan's Central Power Purchasing Agency’s report proved that General Electric’s 9HA-Class turbines had mutually produced only half of full capacity this August. The outcome turned out to be a severe problem in the country where temperature shoots up more than 40 degrees Celsius during summers.

However, against all contentions, General Electric stated that each of the three turbines is performing fairly good in terms of both efficiency and output at present. The company noted that the operational issues noticed this summer are often found during the initial operational phase and commissioning of such large power plants. The company affirmed that these three flagship turbines will supply adequate power in almost 7.3 million homes of Pakistan in the near term.

Zacks Rank and Other Stocks

General Electric currently carries a Zacks Rank #5 (Strong Sell). Some better-ranked stocks in the same space are listed below:

Hitachi Ltd. (HTHIY - Free Report) currently sports a Zacks Rank of 1 (Strong Buy). The company’s earnings per share (EPS) are predicted to be up 13% in the next three to five years. You can see the complete list of today’s Zacks #1 Rank stocks here.

Leucadia National Corporation also flaunts a Zacks Rank of 1. The company’s EPS is projected to be up 18% over the next three to five years.

3M Company (MMM - Free Report) holds a Zacks Rank of 2 (Buy), at present. The company’s EPS is expected to rise 10.2% during the same time frame.

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