General Electric misses by $0.01, misses on revs; reaffirms FY18 EPS guidance (16.89)
- Reports Q4 (Dec) earnings of $0.27 per share, excluding $1.40/share net in negative items, $0.01 worse than the Capital IQ Consensus of $0.28; revenues fell 5% year/year to $31.4 bln vs the $33.93 bln Capital IQ Consensus. Adjusted EPS at low end of guidance excluding $(1.49) of charges for insurance, U.S. tax reform, portfolio actions; power market challenging; Power profit miss driven by market, execution, and charges; strong performance in Aviation and Healthcare; positioned to deliver in 2018.
- Equipment (5)% organically driven by decline in Power on lower aero orders & gas turbine project scope, offset by strength in Healthcare & Transportation
- Services (5)% organically driven by Power Services offset by strength in Aviation, Renewables, & Healthcare
- CFOA -40% to $7 bln
- Backlog $341B, +$13B versus 3Q driven by services
- Power: Orders of $10.2 billion were down 25% with equipment down 24% and services down 26%. Revenues of $9.4 billion were down 15%. Segment profit for the quarter was $0.3 billion, which was significantly below prior year and our expectations. These results include several charges that negatively impacted the segment in the quarter. Excluding these items, the business still operated well below expectations
- Co reaffirms guidance for FY18, sees EPS of $1.00-1.07, excluding non-recurring items, vs. $1.01 Capital IQ Consensus Estimate. GE Capital lower due to insurance-related portfolio actions; Aviation & Healthcare strength; tough Power markets continue. Industrial FCF $6-7 bln: 2017 progress collections stronger than expected; Executing on working capital & capex. "In the fourth quarter, EPS was at the low-end of guidance, excluding insurance-related items, U.S. tax reform, and industrial portfolio actions. Cash performance was above expectations and our visibility and execution on cash is improving. Aviation and Healthcare had strong performances in the quarter. Power was down significantly and we expect market challenges to continue.