General Electric Q3 Industrial Profit Rises, Revenue Mixed; Raises 2021 Guidance

General Electric Company (GE) said it delivered a strong third quarter as orders grew, and margins continued to improve from a year ago. Adjusted GE Industrial organic profit increased 54% year-on-year, organically, driven primarily by increases at Aviation and Power, partially offset by decreases at Renewable Energy and Healthcare. Adjusted Industrial profit margin was 7.5%, up 270 bps from prior year. Revenue was mixed with GE Industrial organic revenue declining 1%, for the quarter. GE Capital revenues were down 3%.

Looking forward, the company increased its 2021 earnings per share, and margins expectations and narrowed full-year free cash flow outlook. The company now anticipates GE Industrial organic revenue growth to be flat for the full year.

Third quarter adjusted earnings per share was $0.57 compared to $0.38, a year ago. On average, 15 analysts polled by Thomson Reuters expected the company to report profit per share of $0.43, for the quarter. Analysts’ estimates typically exclude special items. Adjusted GE Industrial earnings per share was $0.70 compared to $0.42. Adjusted GE Industrial profit was $1.3 billion, compared to $865 million.

On a GAAP basis, earnings from continuing operations to shareholders was $603 million compared to a loss of $1.13 billion, last year. Continuing earnings per share was $0.54 compared to a loss of 1.04.

Total revenues were $18.43 billion, down 1% from a year ago. Industrial organic revenues were $17.6 billion, a decline of 1%. Analysts expected revenue of $19.25 billion, for the quarter. Total orders were $22.1 billion, an increase of 42%; while organic orders were up 42%.

GE Industrial free cash flow was $1.7 billion for the quarter, up $1.8 billion, excluding discontinued factoring programs.

For 2021, the company now expects adjusted earnings per share in a range of $1.80 – $2.10, revised from prior guidance range of $1.20 – $2.00. Adjusted GE Industrial organic margin expansion is now expected to be 350+ bps, updated from previous guidance of 250+ bps. GE Industrial free cash flow is now anticipated in a range of $3.75 billion – $4.75 billion. Analysts polled by Thomson Reuters expect the company to report profit per share of $1.94.

Shares of General Electric Company were up 1% in pre-market trade on Tuesday.

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