GE Delivers on Earnings, IPO Plans and 2014 Guidance

Industrials

Published: April 17, 2014 7:10 am

General Electric Co. (NYSE: GE) is out with its first-quarter earnings report for 2014. The conglomerate posted earnings of $0.33 per share, versus the Thomson Reuters consensus estimate of $0.32 per share. Revenues were $34.2 billion for the quarter, down 2% from a year ago and versus a consensus estimate of $34.36 billion. All in all, this looks like another great quarter on earnings expectations but one with slightly lower revenues — a trend we keep seeing in large companies.

Several items stood out in this report. Excluding the 2013 NBCUniversal impact and restructuring and other charges, operating earnings were up 9% from the year-ago period. GECC’s Tier 1 common ratio (Basel 1) ended the quarter at 11.4%, up 32 basis points.

GE’s backlog ended at $245 billion. Cash from operating activities was $1.7 billion, and GE ended the quarter with $87 billion of consolidated cash and cash equivalents.

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GE also said that its 2014 framework remains unchanged, with a positive bias. The conglomerate also remains on track for its retail finance IPO, and the company is still targeting 70% of its earnings from the industrial businesses. GE gave the following summaries by unit:

The company industrial organic revenue growth was 8% in revenues, while industrial segment profits rose 12% to $3.3 billion.
Growth market revenues were up 7% for the quarter, with double-digit growth in five of nine growth regions.
Services revenues grew 3%, with double-digit growth in Aviation and Oil & Gas. Equipment revenues grew 12%, on strong new product introductions and solid share positions.
The breadth of the GE portfolio was reflected in the quarter as the company offset market volatility in Appliances, Healthcare and Mining.
Infrastructure orders for the quarter were $23.7 billion, flat with the year-ago period.
GE Capital earnings were flat, with ENI (excluding cash and equivalents) at $374 billion at quarter-end, down $7 billion from last quarter.

CEO Jeff Immelt said:

We had strong results in the first quarter in most of our markets, including Power & Water, Aviation, Oil & Gas, and GE Capital. The environment was generally positive, and we executed on our operational priorities with strong organic growth, margin enhancement, and solid cash generation.

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GE shares closed at $26.12 on Wednesday, and the Thursday indication is up around $26.30. Its consensus price target is $28.73, plus it has the dividend yield of close to 3.5%.

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