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Can Issues in Power Ail General Electric's (GE) Q3 Earnings?

General Electric Company GE is scheduled to report third-quarter 2019 results on Oct 30, 2019, before the market opens.

The Power segment comprises Gas Power and Power Portfolio. While Gas Power includes General Electric’s gas lifecycle business, Power Portfolio comprises Grid, Nuclear, Steam, and Power Conversion businesses. The Power segment accounted for 17.3% of Industrial revenues in the second quarter of 2019. Apart from the Power segment, the Industrial segment’s results include that of four other segments.

Factors to Influence Segmental Performance

The Power segment’s dismal performances over the past few quarters have been affecting General Electric. For instance, the segment suffered from weak orders in the second quarter of 2019. This trend might have continued in the third quarter as well.

Also, external and internal challenges — including pricing issues, geopolitical tensions, overcapacity in the industry, issues related to project execution and others — might have influenced third-quarter performance.

For the third quarter of 2019, the Zacks Consensus Estimate for the Power segment’s revenues is pegged at $4,167 million, suggesting respective declines of 11% and 27.4% from the previous quarter and the year-ago quarter’s reported figures. Conversely, the segment’s operating results are predicted to be weak.

However, efforts to restructure the segment are likely to get reflected in the quarter’s results.

Industrial’s Q3 Expectations

The Zacks Consensus Estimate for Industrial’s third-quarter revenues is currently pegged at $24,107 million, suggesting a 10.9% decline from the previous quarter and a 13.2% decrease from the year-ago quarter’s reported figure. Profits for the Industrial segment are likely to be $2,489 million, indicating 5.5% rise from the previous quarter’s reported figure and 7.1% growth from the year-ago quarter’s number. (Read more: General Electric to Post Q3 Earnings: What to Expect?)

Zacks Rank & Other Upcoming Releases

The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some stocks in the industry, which are also likely to report their results soon, are Macquarie Infrastructure Company MIC — to report results on Oct 31; HC2 Holdings, Inc HCHC — to report results on Nov 5; and ITT Inc ITT — to report results on Nov 1.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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