Shares of General Electric Co.
GE,
pulled back Tuesday, after the aerospace, power and renewable-energy company’s disappointing profit outlook for the current overshadowed a fourth-quarter earnings beat that was fueled by strength in the GE Vernova businesses.
For the first quarter through March, GE expects adjusted earnings per share of 60 cents to 65 cents, which is below the current FactSet consensus of 70 cents.
For the full-year 2024, operating profit is expected to be $6.0 billion to $6.5 billion, which reflects GE’s businesses operating independently. BofA Securities analyst Andrew Obin said the outlook, which includes $600 million in stand-alone costs, compared with Wall Street expectations of $7.1 billion.
The stock
GE,
fell 1% in morning trading, but pared earlier post-open losses of as much as 3.6%, and premarket losses of as much as 10.1%. The stock’s selloff comes after it had closed Monday at the highest price since Oct. 24, 2017.
GE’s earnings report may be the last one the company releases before the final breakup, which is expected to occur in early April. The power and renewable-energy businesses will then be spun off as GE Vernova and the remaining business will be relaunched as GE Aerospace.
For the fourth quarter, net income fell to $1.59 billion, or $1.45 a share, from $2.10 billion, or $1.90 a share, in the same period a year ago.
Excluding nonrecurring items, adjusted earnings per share increased to $1.03 from 66 cents, to beat the FactSet consensus of 90 cents.
Total revenue grew 15.4% to $19.42 billion, well above the FactSet consensus of $17.27 billion.
Free cash flow of $3.0 billion was above the average estimate of two analysts surveyed by FactSet of $2.77 billion.
Among GE’s business segments, Aerospace revenue grew 11.9% to $8.52 billion to top the FactSet consensus of $8.50 billion. Order increased 9.7% to $10.62 billion.
For GE Vernova’s businesses, power revenue rose 15% to $5.79 billion, well above the FactSet consensus of $4.89 billion, and renewable-energy revenue jumped 23.4% to $4.21 billion, beating expectations of $3.71 billion. Power orders grew 5.3% to $5.73 billion and Renewable Energy orders were up 0.8% to $5.07 billion.
Looking ahead, GE will host investor days for GE Vernova on March 6 and for GE Aerospace on March 7.
“I’ve never been more confident in the path ahead,” said Larry Culp, chief executive officer of GE and GE Aerospace. “We’ve created industry leaders that will carry GE’s commitment to innovation and continuous improvement while grounded in vital missions.”
GE’s stock has run up 21.7% over the past three months, while the S&P 500
SPX,
has climbed 15.1%.