Wednesday, April 7, 2010

General Electric Co. (NYSE: GE): Q1 Earnings Preview 2010

General Electric Co., the world's biggest maker of jet engines and electric turbines, is scheduled to release Q12010 earnings before the opening bell on Friday, April 16, 2010. Analysts, on average, expect the company to report earnings of $0.16 per share in the first quarter with estimates ranging from a low of $0.12 to a high of $0.21. Revenues for the quarter are estimated to be $36.79 billion. In the Q12009, GE reported earnings of $0.26 per share on revenue of $38.41 billion. Over the past four quarters GE has surpassed analysts' consensus earnings estimate each time.

General Electric Company operates as a technology, media, and financial services company worldwide, with products & services ranging from aircraft engines, power generation, water processing & security technology to medical imaging, business & consumer financing, media content & industrial products.

In the preceding Q42009, the Fairfield, Connecticut-based company reported net earnings of $2.94 billion or $0.28 per share for the fourth-quarter, down 19% from $3.65 billion or $0.35 per share in the prior-year quarter. Earnings from continuing operations for the quarter dropped about 22% to $3.15 billion or $0.28 per share from $4.01 billion or $0.36 per share in the year-ago quarter. Revenue declined 10% to $41.44 billion from $46.21 billion in the same quarter last year. Analysts, on average, expected the company to report earnings of $0.26 per share on revenue of $40.02 billion.

The company expects tough comparisons in the first quarter due to losses of about $250 million related to coverage of the Olympics by its NBC unit and previous-year gains and tax items. In January, the Dow component and industrial bellwether said it is seeing "encouraging signs" in its infrastructure business, and predicted flat earnings for 2010 followed by "solid earnings growth" for the following two years.

For 2010, GE anticipates earnings per share to be flat, compared to $1.03 per share in 2009. The company said it sees potential for retiring its preferred stock and opportunities for stock buybacks. The conglomerate projects flat profit growth for its industrial and capital finance businesses, and potentially negative growth for its media business. Cash flow is likely to grow by $13 billion to $15 billion. Beyond 2010, GE projects earnings-per-share growth for 2011 and 2012.

Looking ahead, over the long term, the company said it plans to cut back its GE Capital finance arm to generate 30% to 40% of overall corporate profit."If you look going forward at GE Capital, at some point this loss cycle rolls over. We are seeing some positive signs and delinquency or non-earnings you've seen some of that in the fourth quarter," chief financial officer, Keith S. Sherin stated.

Last month, GE said it expects to boost its dividend in 2011, thus signaling a comeback after the one of the worst economic crisis.

In terms of stock performance, GE shares have gained nearly 20 percent since the beginning of the year.

Full Disclosure: None.

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