GE Stock Slides After Q1 Earnings, Warns On Inflation Pressure

GE Stock Slides After Q1 Earnings, Warns On Inflation Pressure
  • General Electric Co GE reported first-quarter FY22 adjusted revenue of $16.3 billion flat year-over-year and organic revenues of $16.43 billion, up 1% Y/Y. Total GAAP revenues were flat at $17.04 billion.
  • Total orders increased by 11% Y/Y to $18.9 billion and +13% on an organic basis.
  • Adjusted EPS was $0.24, an increase of 85% Y/Y, above the consensus of $0.19.
  • Total company adjusted profit increased by 18.6% Y/Y to $946 million, and margin expanded by 92 bps to 5.8%.
  • Aviation revenue increased by 12% Y/Y to $5.6 billion, orders increased by 31% Y/Y to $7.21 billion, and segment profit margin expanded 340 bps to 16.2%.
  • Healthcare revenue increased 1% Y/Y to $4.36 billion, orders increased by 8% Y/Y to $4.81 billion, and segment profit margin contracted by 390 bps to 12.3%.
  • Renewable Energy revenue declined by 12% Y/Y to $2.87 billion, orders fell by 21% Y/Y to $2.79 billion, and segment profit margin contracted by 790 bps to -15.1%.
  • Power revenue declined by 11% Y/Y to $3.5 billion, orders grew by 14% Y/Y to $4.16 billion, and segment profit margin expanded by 400 bps to 1.8%.
  • GE's cash from operating activities was negative $(535) million for the quarter, compared to $(2.64) billion in 1Q21. Free cash flow was at $(880) million, up by 174% Y/Y.
  • "We're holding the outlook range we shared in January, but as we continue to work through inflation and other evolving pressures, we're currently trending toward the low end of the range. Importantly, we remain on track to launch three independent, investment-grade companies with leading positions in growing, critical sectors, well positioned to create long-term value," commented GE Chairman and CEO H. Lawrence Culp, Jr.
  • RelatedGE Reiterates FY22 Outlook At Its 2022 Investor Day 
  • FY22 Outlook reaffirmed: GE expects organic revenues to grow in the high-single-digit range and the adjusted organic profit margin to expand by 150+ basis points.
  • It expects Adjusted EPS of $2.80 - $3.50; and Free cash flow of $5.5 billion - $6.5 billion.
  • Price Action: GE shares traded lower by 8.86% at $81.92 on the last check Tuesday.
  • Photo Via Wikimedia Commons

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