Shares of General Electric Co.
GE,
pulled back sharply 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.
Meanwhile, revenue growth is expected to grow in the “high-single-digit” percentage range, while the FactSet revenue consensus of $15.15 billion implies a 4.6% increase.
The stock
GE,
dropped 6.2% in premarket trading, which put it on track for the biggest one-day drop since it sank 6.7% on May 9, 2022. The selloff comes after the stock had closed Monday at the highest price since October 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.
Among GE’s business segments, Aerospace revenue grew 11.9% to $8.52 billion to top the FactSet consensus of $8.50 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.
Free cash flow of $3.0 billion was above the average estimate of two analysts surveyed by FactSet of $2.77 billion.
GE’s stock has run up 23% over the past three months through Monday, while the S&P 500
SPX,
has climbed 15%.
