General Electric's Earnings Fail

A quick look at the headline guidance from General Electric Company (NYSE:GE) would conclude that everything is on track in 2017, as the guidance ranges were exactly the same as those given in the first-quarter earnings presentation. However, the devil is in the details, and the reality is that this was a disappointing set of earnings, as Jeff Immelt signed off his tenure as CEO by guiding investors toward the low end of expectations. Moreover, the tone and commentary suggested more difficulties to come, and it wouldn't be surprising if new CEO John Flannery begins his tenure by cutting guidance.

Let's take a closer look a difficult quarter for the company.

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Will GE Lower Earnings Expectations?

The departure of long-serving CEO Jeff Immelt leaves General Electric Company (NYSE:GE)investors wondering what's next for the company. In reality, it's too much to expect any major changes in the strategic direction of GE, but new CEO John Flannery will begin his tenure facing concerns that the company's stated earnings targets -- specifically, $2 in operating earnings by 2018 -- will have to be taken down. Let's take a closer look at what lies ahead for Flannery.

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Can GE Hit its Target of $2 in EPS by 2018?

s General Electric Company (NYSE:GE) set to abandon its target of $2 in operating EPS (earnings per share) by 2018? It surely wouldn't be a welcome event: Just ask investors in International Business Machines Corp. (NYSE:IBM) after the IT giant abandoned, in late 2014, its target of EPS of $20 by 2015. IBM's decision followed its coming to terms with fundamental declines in its legacy businesses; the stock is still below the level it traded at before the announcement was made. Is GE experiencing the same problems?

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General Electric's Capital Arm

It's well known that General Electric Company  is shifting back to its industrial roots with CEO Jeff Immelt planning to generate 90% of the company's earnings from its digital industrial businesses by 2018. As such, GE Capital assets have been sold off to banks like Wells Fargo & Co and Capital One Financial Corp., while the highly successful Synchrony Financial spinoff also saw General Electric jettisoning financial businesses. With all of this going on, it's easy to forget that the company still has a capital arm, and it happens to be a key part of its future. Here's how and why.

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Jeff Immelt Writes to Investors

General Electric Company (NYSE:GE) CEO Jeff Immelt's annual letter to shareholders outlines what investors should expect from the company in the coming years. While Immelt usually addresses analysts and the professional investment community during presentations, the annual shareholder letter is a chance to directly speak to ordinary shareholders. If you own or are considering buying shares in the company, it's worth taking the time to see what he has planned. In that vein, let's take a look at five key takeaways from Immelt's letter.

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Time to Panic Over General Electric Company Stock?

Another quarter and another revenue disappointment from General Electric Company In other words, the company is starting 2017 in the way it left 2016: executing solidly, but missing revenue estimates while finding ways to meet earnings guidance from non-core sources. As you can see in the chart below, it's not enough of a formula to convince investors, and the stock price has notably underperformed the S&P 500 and its peers. What's going on, and is it reason to panic?

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General Electric is a Special Situations Investment For 2017

Anyone who thinks investing in General Electric Company  stock is merely a proxy for the U.S. industrials sector or even the S&P 500 needs to think again. In the past three years, the stock's performance has decoupled from both, and arguably it could do again in 2017. Let's look at what's been going on and what to expect from the industrial giant in the coming year.

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General Electric Company, Baker Hughes and Oil Prices

General Electric Company's oil and gas division and Baker Hughes Incorporated's  management held an investor meeting recently to outline the rationale for their merger, which was announced back in October. As with the acquisition of Alstom's energy assets, GE management expects most of the synergies to come from cost rather than revenue. As such, it's tempting to think of the merger as creating a company set to generate earnings growth largely irrespective of the oil cycle.
Let's look at the cases for and against this argument.

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General Electric Company Cuts Guidance

General Electric Company reduced its full-year 2016 revenue outlook. Does that mean investors should sell the stock? The reduction, which the company announced while providing third-quarter results on Oct 21, has since been overshadowed by the announcement of an agreement to merge its oil & gas operations with Baker Hughes Incorporated . However,the two actions should be thought about jointly when considering what you should do with the stock. Here's what you need to know:

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Will General Electric Company Hit its Growth Targets?

It's been a disappointing couple of months for shareholders in General Electric Company. Since the release of its second-quarter results on July 22, the stock price has started to notably underperform the S&P 500. One explanation sees the market doubting the company can hit its organic revenue growth target of 2% to 4% for 2016, especially since organic revenue actually declined 1% in the first half. Here's why the doubters are wrong

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General Electric Company Teams Up With Microsoft Azure

General Electric Company's (NYSE:GE) recently announced partnership with Microsoft Corporation (NASDAQ:MSFT) makes GE's cloud based platform-as-a-service (PaaS) Predix available on Microsoft's cloud service Azure. The deal between the two iconic blue chips makes great copy, but what does it mean for the investment case for General Electric stock?

General Electric Company is connecting railroads to the industrial internet. Image source: GE Digital. 

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General Electric Company Investor Presentation

When analysts at a heavyweight investment bank issue an underweight rating on a stock, it's usually a good idea to re-examine the case for buying or holding the shares. As such, J.P. Morgan's negative call on General Electric Company caused no little angst among the stock's supporters. With this in mind, let's take a look at CEO Jeff Immelt's presentation at the recent Electrical Products Group (EPG) conference, and what it means to the stock's prospects.

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General Electric Earnings Guidance

After outperforming a flat S&P 500 by nearly 24% last year, General Electric Company has slightly underperformed the market in 2016. The story of GE refocusing its business (away from GE Capital) is largely known to the market now, so is General Electric's period of market-beating returns over? Let's take a look at what to expect in 2016 in light of the recent first-quarter results.

GE data by YCharts.

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3 Industrial Internet of Things Stocks

In a world getting used to global growth rates at far lower levels than in previous decades, large industrial companies can't simply rely on revenue growth in order to increase earnings significantly. Something more is needed. One of those "somethings" is the Industrial Internet of Things (IIoT), and there are three early adopters set to win out. Let's take a closer look at them.

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General Electric Company Management Wants You to Know This About its Future

When a company's management is asked what investors might not understand about their business or earnings prospects, it's usually time to listen. Based on his comments at the Barclays Industrial Select Conference, General Electric Company's  CFO Jeff Bornstein thinks the market is underestimating the potential of Predix, GE's cloud-based platform-as-a-service (PaaS) solution that runs applications helping users capture and analyze industrial data. Does this mean the company has a hidden value about to be released in future years?

DATA ANALYTICS CAN HELP CUSTOMERS RUN GENERAL ELECTRIC TURBINES MORE EFFICIENTLY. IMAGE SOURCE: GENERAL ELECTRIC.

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Services Are the Key to General Electric's Growth

The market didn't receive General Electric Company's latest earnings report very well, even though the industrial giant maintained full-year 2016 guidance. For obvious reasons, most of the immediate attention focused on its oil and gas segment, but I think its overall services business, and particularly services orders, is the key metric to follow this year. Here's why.

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Aerospace Stocks With Upside Potential

Given an avoidance of a major slowdown in the global economy, the aviation industry looks set for another good year. The commercial jet order book stands at nine years' worth of last year's delivery rates, and aluminium supplier Alcoa just forecast 8% to 9% global sales growth for the industry. Meanwhile, a leading industry body, the International Air Transport Association (IATA), recently predicted 10% net profit growth for the worldwide airline industry in 2016. However, many leading aerospace companies are giving modest outlooks for 2016. Why is this so, and could there be hidden upside in the sector?

GENERAL ELECTRIC COMPANY'S LEAP ENGINE WILL GENERATE STRONG LONG-TERM REVENUE. IMAGE SOURCE: CFM INTERNATIONAL.

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What About General Electric Company Stock in 2016?

General Electric Company (NYSE:GE) has notably outperformed the S&P 500 and the industrial sector in 2015, but is it possible that the age-old industrial conglomerate can continue this strong performance in the new year? The answer to the question lies in assessing what went right in 2015, and asking if it's a one-year blip, or a sustainable operating trend. 
CEO Jeff Immelt recently presented the company's annual outlook meeting, and much of what he outlined helps answer these questions. Let's take a closer look.

GE data by YCharts.

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What Siemens Results Mean to General Electric Investors

It's always interesting to hear what competitors are saying about end markets and their competitive positioning, and there aren't many more iconic rivals in the industrials space than General Electric Company  and Siemens. Let's look at Siemens' latest earnings and commentary on end markets, and compare where the two companies are headed.

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General Electric Company Profting From the Industrial Internet

A lot has been said about General Electric Company's industrial Internet, but a lot less about how it's likely to favorably change the operating metrics of the company. Investors' primary focus is usually on a company's bottom line and how much they are paying for it.

With this in mind, let's take a look at five ways the industrial Internet could make General Electric a more profitable company.


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