Full 360-Degree Preview of GE Earnings Expectations (GE, BRK-A)

General Electric Co. (NYSE: GE) is set to report its first quarter earnings on Thursday morning and investors will view it as a proxy for the broader economy. Investors seem to have slightly higher expectations for 2011 now because of the improving economy.

Thomson Reuters estimates are $0.28 EPS and $34.64 billion in revenues.  The estimates for the current quarter are $0.33 EPS and $34.7 billion in revenues.  For 2011, GE is expected to report earnings of $1.33 EPS on $142.67 billion in revenues.

What Jeff Immelt is likely to discuss in capital structure is paying back Warren Buffett for the 10% preferred shares at Berkshire Hathaway Inc. (NYSE: BRK-A).  That is still likely a late 2011 event.  It is probably too soon to expect another boost to the dividend, but we would look for GE to update how many shares have been repurchased now that it has resumed buying back shares.

GE shares rose to above $21.00 before Japan’s issues.  Shares seem to have gotten stuck in a $19+ to $20+ trading range since.  Today marks an interesting move if you look at the Stockcharts.com chart.  GE is now right back above the 50-day moving average for the first time in seven or eight trading days.  That 50-day moving average is currently listed as $20.31, so late-day trading may influence behavior of chartists going into earnings.

If we look at the monthly options that expire in May, options traders seem to be braced for a move of up to about $0.75 in either direction for GE shares after earnings.  Thomson Reuters has a consensus price target on GE of $23.31

GE usually has too many moving parts for any single unit to be a major risk, at least outside of its finance operations.  We would look for Immelt to talk about how GE is still shrinking GE’s finance unit and is looking at improving credit metrics.  It was not that long ago that Immelt said he is happier with GE’s overall portfolio more than he ever has been.

Be advised, the news from Japan could be a huge roadblock ahead. GE has much riding on the growth of nuclear power.  If too many nations slow down or halt nuclear power, it will be hard for GE to avoid the fallout.  The company also has closed its NBC Universal deal with Comcast.

With shares above $20.40, the 52-week trading range is $13.75 to $21.65 and shares are back above a $217 billion market cap.

JON C. OGG