GE Reports Q3 Earnings Miss

Earnings Miss

Shares in General Electric are trading a little lower pre-market on Wednesday as uncertainty amidst the US elections impacts equities markets. General Electric reported its Q3 earnings last week and despite a weaker than expected performance, shares had been trading a little firmer over recent days.

GE reported third-quarter earnings per share of -$0.14, undershooting estimates for a -$0.4 EPS. Despite the miss in headline earnings, revenues beat estimates at $19.42 billion versus $18.73 billion expected.

Weak Performance Overall

Looking at the breakdown of the results, however, the performance was decidedly weak when compared with last year.

Revenues in the aviation segment of the business were down 39% year on year. Revenues in the health-care segment were 7% lower. Notably, orders were down for all segments from the 12% decline seen in the power segment up to the 54% decline in the aviation segment.

Commenting on the results, General Electric CEO Lawrence Culp said:

“We are managing through a still-difficult environment with better operational execution across our businesses, and we are on track with our cost and cash actions. While our work continues, GE’s transformation is accelerating, and we expect Industrial free cash flow to be at least $2.5 billion in the fourth quarter and positive in 2021.”

CEO Strikes Optimistic Tone

Culp was keen to strike an optimistic tone during the earnings call. While highlighting the weaknesses over the quarter, his message was tempered by praise for the company’s efforts and the rebound which is underway.

Culp told investors:

“Despite the ongoing effects of the COVID-19 pandemic on our year-to-date results, we’re building momentum across GE. Our top-line remains pressured, but our actions are driving improved profitability and cash performance”.

Uncertainty Ahead

In terms of looking ahead, Culp was also clear in his message that a great deal of uncertainty remains, saying:

“Clearly, our markets are, by and large, stabilizing, but to underscore the obvious, stability is not yet recovery. We still acknowledge that the full duration, magnitude, and pace of this pandemic across our end markets, operations, and supply chain is uncertain.”

GE Shares Testing Key Resistance

Shares in General Electric have been higher over recent weeks. The market attempts to breakout above the base formed along the 6.00 level.

So far, the 7.93 level is holding as resistance. Although, while price holds above the 7.19 support, the focus is on an eventual break higher. The big level to note is the 8.57 region, above which the outlook turns firmly more bullish.

Have you been testing your strategy on a Demo Account? Sign up now and begin practicing!