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GE Surprises Investors with Impressive Q2 Performance

Story Highlights

Shares of General Electric jumped in the early trading session on Tuesday after the company reported a solid second quarter.

General Electric Co. (NYSE: GE) has reported excellent results for the second quarter of 2022. Adjusted earnings stood at $0.78 per share, coming in significantly higher than the Street’s estimate of $0.37 per share and the year-ago figure of $0.22 per share.

Total orders grew 2% year-over-year to $18.7 billion, driven by a 26% rise in the orders for GE Aerospace to almost $7 billion. The rise was offset by a decrease in orders for GE Healthcare, Renewable Energy, and Power segments.

GE Healthcare orders slipped 1% to $4.8 billion, while Renewable Energy orders fell 3% to $3.1 billion. The Power segment saw the steepest decline in orders at 16% to just above $4 billion.

The Chairman and CEO of General Electric, H. Lawrence Culp, Jr., said, “The GE team delivered a strong second quarter with growth in orders, revenue, and profit, as well as positive free cash flow. Aerospace was a key driver of our performance this quarter as the industry recovery builds momentum. In higher-margin services, GE delivered double-digit revenue growth, with Aerospace up 47% compared to last year.”

“We continue to trend towards the low end of our 2022 outlook on all metrics except free cash flow (FCF), which is lower due to timing of working capital and Renewable Energy-related orders,” Culp added.

For full-year 2022, the Boston-based company had earlier provided a guidance range of $2.80-$3.50 for EPS and $5.5 billion-$6.5 billion for FCF.

Wall Street’s Take on GE

Ahead of GE’s second-quarter results, Stephen Tusa of J.P. Morgan (NYSE: JPM) reiterated a Hold rating on the stock but refrained from providing a price target.

The analyst said, “Whether 2Q is in line or not, on the back of the 1Q miss, we continue to see risk to 2H22 and most importantly for 2023, where we remain >30% below Street expectations.”

On TipRanks, the stock has a Moderate Buy consensus rating based on nine Buys and four Holds. GE’s average price target of $93.09 reflects upside potential of 36.2% from current levels.

Insiders & Hedge Funds Raise Stakes in GE Stock

TipRanks’ Insider Trading Activity tool shows that Insider Confidence Signal is currently Very Positive for GE, with corporate insiders buying the company’s stock worth $10.8 million in the last three months.

Additionally, TipRanks’ Hedge Fund Trading Activity tool shows that confidence in GE is currently Very Positive, as the cumulative change in holdings across all 24 hedge funds that were active in the last quarter was an increase of 11.2 million shares.

Market’s Reaction to GE’s Q2 Performance

GE stock was trading 5.3% higher in the pre-market session on Tuesday, at the time of writing. The Street was preparing for an unimpressive quarter and several analysts had cut their sales and profit expectations in the recent past. This is because, over the past five quarters, the multinational conglomerate has been reporting mixed results, making investors apprehensive about the stock that has lost 33.6% in the last year.

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