NEW YORK (TheStreet) -- General Electric (GE - Get Report) stock is decreasing by 1.16% to $24.80 in midday trading on Tuesday, after the company announced the private exchange of debt securities for new notes with shorter maturities.
The company will exchange up to $30 billion worth in debt for new notes with either a six-month, five year, 10 year or 20 year maturity. Up to $15 billion will be issued in new notes that will mature next year.
About $100.4 billion in debt securities qualify for the exchange, which is part of GE's restructuring plan.
The company announced earlier this year that it will reduce its financial services business to focus on the growth of its industrial businesses.
Additionally, GE's subsidiary Power Generation Services will upgrade its Mountainview Generating Facility in Redlands, Calif. to reduce its emissions and lower startup times.
The company signed a service agreement with Southern California Edison to boost production at the renewable energy plant.
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 3.59%.
- 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