NEW YORK (TheStreet) -- General Electric (GE) - Get Report stock is sliding by 1.36% to $24.60 in late morning trading on Monday, after the company announced it will move production of large, gas-powered engines and 350 jobs to Canada from Waukesha, Wis., Reuters reports.
This move is the company's latest in a series of deals to move thousands of jobs overseas to gain access to government export credit from other countries, as it could not gain U.S. export-import financing for the deals, according to Reuters.
General Electric said it would invest $265 million in a manufacturing plant in Canada, which is set to open in approximately 20 months, in its most recent attempt at getting Congress to renew the U.S. Export-Import bank's expired charter, Reuters adds.
House of Representatives Speaker John Boehner's resignation will not help the possible renewal of the U.S. Export-Import bank's charter, as he supported the bank whereas his likely successor House Majority Leader Kevin McCarthy has opposed its renewal, GE Vice Chairman John Rice told Reuters.
"Let's face it, you've got a system in the United States now where a significant majority of the members of Congress can support something and it won't move forward because of the perspective of the few and the money behind that perspective," Rice told Reuters, referring to outside conservative groups that have been calling for the U.S. Export-Import Bank to be closed permanently.
General Electric is a diversified infrastructure and financial services company based in Fairfield, Conn.
Separately, TheStreet Ratings team rates GENERAL ELECTRIC CO as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
We rate GENERAL ELECTRIC CO (GE) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and generally higher debt management risk.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- GE's revenue growth has slightly outpaced the industry average of 4.2%. Since the same quarter one year prior, revenues slightly increased by 0.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has increased to $6,299.00 million or 20.00% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 3.75%.
- 40.46% is the gross profit margin for GENERAL ELECTRIC CO which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -4.25% trails the industry average.
- The debt-to-equity ratio is very high at 2.89 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Industrial Conglomerates industry and the overall market, GENERAL ELECTRIC CO's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: GE