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General Electric Stock Slides After Q1 Earnings Beat; Confirms Lower End Of 2022 Profit Guidance

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“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,” said CEO Larry Culp.

General Electric  (GE) – Get General Electric Company Report posted better-than-expected first quarter earnings Tuesday, while confirming its full-year profit guidance and noting that its historic plans to split the group into three separate companies remains on track. 

General Electric said adjusted non-GAAP earnings for the three months ending in March were pegged at 24 cents per share, a figure that was essentially flat to last year but ahead of the Street consensus forecast of 19 cents per share. Group revenues, General Electric said, were also little-changed from last year at $17 billion, but came in modestly higher than analysts’ estimates of a $16.9 billion tally.

GE confirmed its 2022 forecasts, which is updated last month, saying its expects adjusted earnings in the region of $2.80 to $3.50 per share for the full year while generating free cash flow in the region of $5.5 billion to $6.5 billion, a figure that will improve to $7 billion in 2023

Supply chain and cost pressures are likely to last into at least the second half of the year, GE said in March, noting that the “magnitude” of these challenges would pressure growth profit and free cash flow growth as well.

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“This quarter, the GE team improved services, orders, and cash while scaling lean in all businesses to drive margin expansion,” said CEO Larry Culp. “Our continuous operational improvements set us up to reinvest in innovation across GE, and our businesses remain focused on growth, supported by continued recovery at Aviation and strong demand at Healthcare.”

“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,” he added. “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.”  

GE shares were marked 1.23% higher n pre-market trading immediately following the earnings release to indicate an opening bell price of $90.99 each.

The group also noted it’s on track to split the iconic group into three separate ‘investment grade’ companies, a plan that was unveiled last year and marks one of the most significant changes in the industrial giant’s 130-year history.

General Electric will form three different companies — focusing on energy, healthcare and aviation — with current CEO Larry Culp tabbed as non-executive chairman of the developing healthcare group — which will be run by Peter Arduini — when it is spun-off in 2023.

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