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GE

GE Q3 Earnings Beat on Higher Operating Profit

Industrial goods manufacturer General Electric CompanyGE is actively pursuing its massive restructuring program in order to create a simpler and nimbler firm with a re-focus on core operations. In addition to the sale of over 4,400 commercial real estate properties of GE Capital Real Estate, GE has vouched to divest most of the financial units under GE Capital over the next 24 months.

GE also announced that it is set to receive the green signal from the European Union for its $14-billion proposed bid to acquire Alstom's energy assets. The Alstom deal promises excellent return on capital, supply chain efficiencies and cost synergies. It also marks the biggest acquisition ever for GE and would significantly expand its geographic footprint in a recovering Europe. Alstom's energy assets will be integrated into GE's power generation unit, thus making it one of the biggest manufacturers of power plant equipment globally. In addition to incremental revenues, the deal further reinforces GE's strategy to focus on core industrial operations. However, for a company as large as GE, additional revenues needed for growth are quite large, posing a challenge in developing businesses on such a vast scale. In the last four trailing quarters, GE has reported a positive average earnings surprise of 1.96%, beating estimates thrice.

Earnings estimate revisions have moved in both directions in the last month as investors remain sceptical about the performance of the company. Currently, GE has a Zacks Rank #3 (Hold), but that could definitely change following its earnings report, which was just released. We have highlighted some of the key stats from this just-revealed announcement below:

Earnings: GE operating earnings beat estimates. The Zacks Consensus Estimate called for EPS of 26 cents, and the company reported operating+verticals EPS of 29 cents, while operating earnings were 32 cents.

Revenue: Quarterly revenues beat estimates. GE posted revenues of $31,680 million, compared with Zacks Consensus Estimate of $28,666 million.

Key Stats to Note: 2015 has been termed as a pivotal year for GE as it renews the strategic aim to establish itself as a manufacturing-based entity with emphasis on big-ticket items such as aviation engines, drilling machines, generators, medical equipment and scanners. Consequently, the future quarters are likely to script a new history for the company. GE reiterated its industrial operating EPS guidance for 2015 and remains confident to return $30 billion to shareholders in the current year.

Stock Price: Shares were slightly down in pre-market trading following the release as investors probably looked for healthier order bookings.

Check back our full write up on this GE earnings report later!

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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.


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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