This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

GE Industrial Profit Will Grow by 10%: Oppenheimer

NEW YORK ( TheStreet) -- General Electric (GE - Get Report) has seen its stock lag the market a bit this year, but the company is on track to see profit from its industrial units grow by 10% in 2014, according to Oppenheimer analyst Christopher Glynn.

GE's shares closed at $22.90 Friday, returning 10% year-to-date, which trailed the stellar 15% returns for the Dow Jones Industrial Average (^DJI) and the S&P 500 Index (SPX.X).

The shares trade for 12.6 times the consensus 2014 earnings estimate of $1.82, among analysts polled by Thomson Reuters.

GE reported first-quarter operating earnings of $4.059 billion, or 39 cents a share, compared to $4.666 billion, or 44 cents a share, in the fourth quarter, and $3.567 billion, or 34 cents a share, during the first quarter of 2012.

While the bottom-line results came in ahead of the consensus estimate of 35 cents, investors were initially less than thrilled as the company's industrial revenue was down 6% year-over-year, to $22.7 billion. Please see TheStreet's earnings coverage for a full review of General Electric's first-quarter results.

The industrial segment seeing the biggest decline was Power & Water, with first-quarter revenue down 16% from a year earlier, to $22.7 billion. CEO Jeff Immelt said in the company's earnings release on April 19 that "Power & Water markets were worse than we expected. While we anticipated significantly fewer wind and gas turbine shipments, we saw additional pressure in European Power & Water services. This weakness also had a negative impact on margins."

GE is aiming to improve its profit margin for its industrial segments by 70 basis points by the end of the year.

In a note to clients on Sunday, Glynn wrote that "we continue to view some of the disruptive complexion of 1Q trends as largely reconcilable with the full-year plan," although his revenue and earnings model for GE factors in a margin improvement of just 50 basis points.

Glynn estimates that GE Capital will have flat year-over-year revenue in 2014, with profit for the financial arm increasing by 5%. General Electric continues to deemphasize GE Capital as part of Immelt's long-term strategy to focus on growing the conglomerate's industrial segments and lowering its reliance on short-term funding.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
GE $30.13 0.80%
AAPL $92.69 -0.59%
FB $119.49 1.40%
GOOG $711.11 1.40%
TSLA $214.84 1.60%


Chart of I:DJI
DOW 17,740.63 +79.92 0.45%
S&P 500 2,057.14 +6.51 0.32%
NASDAQ 4,736.1550 +19.0610 0.40%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs