NEW YORK (TheStreet) -- Shares of General Electric Co. (GE) are slightly lower at $24.45 on heavy trading volume today after the company said that profit could be hurt next year by the decline in oil prices, the Wall Street Journal reports.
About 55.43 million shares changed hands by 3:13 p.m., compared to the average of 32.05 million shares.
At an Investor Meeting yesterday, the company said it expects industrial per share earnings next year of between $1.10 and $1.20, while earnings from its GE Capital finance unit will be about 60 cents a share, for a total of between $1.70 a share and $1.80 a share. Analysts forecast 2015 GE earnings up 7% to $1.79 a share, the Journal said.
To adjust to the changing landscape in the energy industry, the company said it is cutting costs at its oil and gas unit and expects flat to negative operating earnings from the business next year, the Journal added.
Revenue from its drilling and surface division is forecast to fall 10% in 2015.
Separately, Credit Suisse reduced its EPS estimates for GE slightly, while maintaining its "outperform" rating and price target of $30 following the meeting.
U.S. crude-oil futures, which have lost about 50% since June, ticked up today near $63 a barrel as U.S. data showed falling crude inventories, stemming deep losses brought on by a supply glut and signals from OPEC producers and Russia that they will not cut production, CNBC said.
Brent futures for February delivery were up 1.63% to $60.99 at 2:39 p.m in New York.
Separately, TheStreet Ratings team rates GENERAL ELECTRIC CO as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate GENERAL ELECTRIC CO (GE) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, growth in earnings per share, increase in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- GE's revenue growth has slightly outpaced the industry average of 1.3%. Since the same quarter one year prior, revenues slightly increased by 1.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- GENERAL ELECTRIC CO has improved earnings per share by 6.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, GENERAL ELECTRIC CO increased its bottom line by earning $1.47 versus $1.38 in the prior year. This year, the market expects an improvement in earnings ($1.67 versus $1.47).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Industrial Conglomerates industry average. The net income increased by 10.8% when compared to the same quarter one year prior, going from $3,191.00 million to $3,537.00 million.
- Net operating cash flow has increased to $6,035.00 million or 15.36% when compared to the same quarter last year. Despite an increase in cash flow, GENERAL ELECTRIC CO's average is still marginally south of the industry average growth rate of 21.54%.
- You can view the full analysis from the report here: GE Ratings Report