GENERAL ELECTRIC (GE)
Locomotives, media, high finance and medical equipment don't appear to have much in common. But if you know how to manage these businesses properly, they work together quite nicely. Yes, GE is the parent company of this fine website.
Reports Q1 earnings Friday 4/11 at about 630a ET. Conference call at 830a ET.
WHAT WILL MOVE THE STOCK:
TOLD YA SO, U.S. IS OK OR... - General Electric is known for giving reliably predictable earnings reports. In this frenetic, volatile market, "reliable" and "predictable" aren't boring, they're very desirable qualities. But that will make any surprises that much more... surprising. Good earnings/sales for GE will be used as evidence that the U.S. economy and American multinational firms are doing just fine. But soft results may be extrapolated to mean there's trouble ahead. Fast Money's Guy Adami says GE numbers will give a good read on how other big manufacturing companies will do, especially Honeywell .
WHERE'S THE GROWTH? - It's not so easy to keep up double-digit sales growth when you're closing in on $200 billion in annual sales. GE's Infrastructure unit should continue to post strong numbers thanks to booming construction in and the Middle East. CEO Jeff Immelt recently said Q1 Infrastructure orders growth would be "strongly double-digit." Last quarter, Infrastructure sales jumped up 30% from year-ago levels. What about U.S. sales? How are other business units doing? Especially...
GE'S FINANCIAL ANGLE - GE's Money and Corporate Finance units together made 30% of the entire company's profits in the fourth quarter. Both are growing strongly, but they're in a business . Goldman Sachs says watch for an increase in loss reserves at GE Money. Is GE finding business opportunities in the tight credit market? Has it seen any increase in problem loans?
GUIDANCE - Will GE renew its forecast of 10+% growth in earnings for 2008? How will the company continue to grow in the weakening economic environment?
ECOMAGINATION - GE is a prime example of a big company seeing opportunities in "going green." High-efficiency locomotives, wind mills, water treatment and more. What's making money now? What's the medium- and long-term view?
DREAMLINER EFFECT? DON'T COUNT ON IT - On Wednesday, Boeing delayed its new Dreamliner jet for another six months. GE builds engines for the Dreamliner. Could the delay hurt GE? Unlikely. Boeing didn't change its earnings guidance for this year, so it'd be a stretch to see any effect on GE. Call this a red herring.
ESTIMATES:
Q1 EPS up 16% to $0.51, revenues up 9% to $43.680 billion
Q2 EPS up 10% to $0.58, revenues up 10% to $46.676 billion
FY 08 EPS up 10% to $2.43, revenues up 11% to $192.176 billion
Source: Thomson Financial
Year-ago actuals: Q1 EPS $0.44, Rev. $40.195 billion
*All estimates are current as of 4/10 and subject to change.*
FACTOIDS:
LOOKS CAN BE DECEIVING - GE shares are close to unchanged so far this year, but there have been some big moves in the stock price. On March 10th, GE stock ended a five-month slide that saw the price fall roughly 25% (from $42.12 on 10/2/07 to $31.70 on 3/10/08). In just a month, GE has recovered about half of those losses.