On April 25, before the opening of the market, General Electric Company (NYSE:GE) is expected to release the results of its operations for the first quarter of 2023.

Over the course of the past 60 days, there has been no change in the earnings forecast provided by the Consensus Estimate for the company’s first quarter. The company has an exceptional history of beating earnings expectations, having beaten the Consensus Estimate in three of the preceding four quarters while falling short in only one of those quarters.

Let’s take a look at the current state of affairs at General Electric in light of the upcoming earnings season.

Important Considerations

The likelihood exists that the ongoing recovery in the commercial market and healthy consumer demand contributed to the success of GE’s Aerospace division in the first quarter. According to the forecast provided by Consensus Estimate, the Aerospace segment’s revenues for the first quarter are expected to increase by 22.7% when compared to the number that was recorded one year ago. Additionally, a comeback in demand in the Power segment after several months of sluggishness is likely what drove the company’s growth. This segment accounts for the majority of the company’s revenue.

On the other hand, reduced onshore wind volumes in the United States and sustained pressure from the characteristics of the onshore North American market are likely to have caused a decrease in the number of orders placed in the Renewable Energy segment. It is anticipated that problems with General Electric’s supply chain, such as labor and material shortages as well as excessive logistical costs, have had a negative impact on the company’s performance in the quarter that will soon be reported. It is likely that the top line was impacted negatively by the effects of foreign currency headwinds in the first quarter as well given the significant international presence of the company.

According to the forecast provided by Consensus Estimate, General Electric’s revenue in the first quarter is expected to drop by 21.4% when compared to the number that was reported for the same period last year. The average estimate for earnings points to a fall of 45.8% compared to the figure that was reported for the same time last year.

Earnings Highlights for the Fourth Quarter

The adjusted earnings that General Electric announced for the fourth quarter of 2022 were $1.24 per share, which was higher than the Consensus Estimate of $1.11 per share. Non-recurring events contributed 42 cents less to these earnings than expected. The increase in profits was 34.8% higher year-over-year, which can be attributed to the higher revenues. The company’s total revenue of $21,786 million fell short of the consensus estimate of $21,938 million. The top line, on the other hand, climbed by 7% year over year because of the robust success of the Aerospace, Power, and Healthcare businesses. 

Featured Image: Megapixl

Please See Disclaimer