GE Q1 2021 Earnings Report Recap

GE beat on earnings, missed on revenue

GE Earnings Results
Metric Beat/Miss/Match Reported Value Analysts' Prediction
Adjusted EPS Beat $0.03 $0.02
Revenue (billions) Miss $17.1 $17.5
Renewable Energy Revenue (billions) Match $3.2 $3.2

Source: Predictions based on analysts' consensus from Visible Alpha

Key Takeaways

  • Renewable energy revenue matched analyst expectations, climbing by about 2% year over year.
  • As one of GE's fastest-growing areas, renewable energy revenue could be poised for further growth as the Biden administration prioritizes clean energy initiatives.
  • Adjusted EPS beat analyst expectations, while revenue came in slightly below predictions.

GE Financial Results: Analysis

General Electric Company (GE), known to investors as GE, reported Q1 FY 2021 earnings that were mixed. Adjusted earnings per share (EPS) were 50% higher than analyst expectations at $0.03. On the other hand, revenue came in slightly below analyst expectations. GE's revenue for Q1 FY 2021 was $17.1 billion, versus analyst predictions of $17.5 billion.

GE's Key Metric: Renewable Energy Revenue

Investors may also have watched for GE's key metric of revenue generated by the company's renewable energy business, includes the company's wind, hydro, solar, and other renewable energy offerings. GE reported $3.2 billion in revenue for its renewable energy unit, matching analyst expectations and increasing about 2% year over year (YOY). GE's renewable energy business has grown much faster than the company's overall revenue in recent years, in part because the conglomerate has shed many longtime legacy units, such as its lightbulb business.

Renewable energy revenue could also be poised for future growth as the Biden administration has signaled an interest in clean energy initiatives. Growth in GE's renewable energy unit is crucial for overall revenue performance, especially as GE's aviation unit, which has been heavily affected by the ongoing COVID-19 pandemic, continued to struggle in Q1 FY 2021, reporting a 28% YOY decline in revenues.

GE's Guidance and Stock Performance

GE announced in its Q1 earnings release that it predicts industrial revenues to grow in the low-single-digit range for 2021, with adjusted EPS for the year between $0.15 and $0.25.

GE shares were down more than 3% in pre-market trading following the earnings release. Nonetheless, the company's stock has surged in the past year, providing one-year trailing total returns of 117.8% as compared with 47.6% for the S&P 500.

GE Earnings Call Recap

In the Q1 earnings webcast presentation, GE executives emphasized that the company faces continued organic top-line pressure. Strength in GE's healthcare unit could not offset the downward trend in its aviation line. Still, there are reasons for optimism, including industrial free cash flow performance up $1.7 billion YOY and significant improvement in working capital flows over the same period. The company also fares well on the liquidity front, with $32 billion of cash, and GE reduced its debt by approximately $4 billion in the quarter. Overall, executives say that solid Q1 results have set up GE to deliver on its 2021 commitments.

Next Earnings Report

GE's next earnings report is estimated to be released on July 16, 2021.

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