Thursday, July 21, 2011

General Electric (NYSE: GE): Q2 Earnings Preview 2011

General Electric Co. (NYSE: GE) is scheduled to release its fourth-quarter earnings before the opening bell on Friday, July 22, 2011. Analysts, on average, expect the company to report earnings of 32 cents per share on revenue of $34.72 billion. In the year ago period, the company reported earnings of 30 cents per share on revenue of $37.44 billion.

General Electric Company (GE) operates as a technology, media, and financial services company worldwide. The Company’s products and services include aircraft engines, power generation, water processing, security technology, medical imaging, business and consumer financing, media content and industrial products.

In the preceding first quarter, the Fairfield, Connecticut-based company's net income was $3.43 billion, or 31 cents a share, compared to $1.95 billion, or 17 cents a share, in the year-ago quarter. On an adjusted basis, the company earned 33 cents a share. Revenue increased 6% to $38.4 billion from $36.20 billion. Analysts, on average, had expected the company to report earnings of 28 cents on revenue of $34.64 billion.

In May, Chief Executive Jeff Immelt reiterated optimism in the conglomerate's overall business prospects Wednesday, saying he's seen nothing in the global economy to derail his positive outlook. Immelt, speaking at an annual Electrical Products Group conference in Florida, also said operating margins in GE's big industrial businesses, a sore spot for some investors after the first quarter, should climb in the second half of the year and into 2012. Overall, he forecast a 5% to 10% increase in organic industrial orders this year. Immelt said he expects the company to generate about $30 billion in cash between 2011 and 2014 above what it already has committed for various purposes. Priorities for the excess cash will be raising GE's dividend to levels "consistent with the history of the company," he said, as well as reducing its share count through buybacks.

That tremendous demand for industrial products is largely coming from key emerging markets such as China, Brazil and parts of the Middle East. Orders for energy-production-related equipment and services also got a bump from Japan as the country repairs its power grid following the massive earthquake and tsunami in March.

The company is also working on expanding its domestic manufacturing operations. Increased demand for industrial products like gas turbines and jet engines is helping to fuel growth in this market. 

GE has adopted strategic imperatives to strengthen its portfolio by building strong growth platforms and generating cash from low-return businesses. Its focus remains on accelerating organic growth and achieving technical and service excellence, while building enduring customer relationships around the world. As the economy chugs along, GE expects to see rising demand across its broad portfolio, from train locomotives to medical imaging devices, to LEDs. The company also anticipates strong international growth, especially in growing markets like China and India. All in all, GE estimates sales will rise up to 5% in 2011. And the company projects to have as much as $30 billion in cash by 2013. Last month, CEO Jeff Immelt Immelt said that GE Capital may be able to pay dividends to the parent company by 2012. 

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