GE Q1 2022 Earnings Report Recap

GE beat on earnings but missed on revenue

Key Takeaways

  • GE's aviation revenue came in below analysts' expectations.
  • GE's aviation business is dependent on the airline industry, which was heavily affected by the COVID-19 pandemic.
  • The company expects its aviation revenue to grow 20% or more for all of FY 2022.
GE Earnings Results
Metric Beat/Miss/Match Reported Value Analysts' Prediction
Adjusted EPS Beat $0.24 $0.18
Revenue Miss $17.0B $17.1B
Aviation Revenue Miss $5.6B $5.7B

Source: Predictions based on analysts' consensus from Visible Alpha

General Electric (GE) Financial Results: Analysis

General Electric Company (GE) reported mixed earnings results for Q1 FY 2022. Adjusted earnings per share (EPS) rose 84.6% year over year (YOY), beating consensus estimates. GE's revenue was relatively flat compared to the year-ago quarter, missing expectations. The company's aviation revenue also came in below estimates.

GE's shares fell more than 3% in pre-market trading. Over the past year, GE's shares have provided a total return of -16.9%, well below the S&P 500's total return of 2.6%.

GE Aviation Revenue

GE's revenue for its aviation segment rose 12.2% year over year, its fastest pace since the final quarter of FY 2018. GE's aviation segment designs and produces both commercial and military aircraft engines, integrated engine components, electric power, and mechanical aircraft systems. It also provides aftermarket services to support these products.

Aviation is an especially important aspect of GE's business for a number of reasons. First, it is the segment that generates the largest share of the company's revenue and profits. Second, GE plans to spin off its healthcare and energy businesses over the next several years in order to focus on aviation. Third, GE's aviation segment has been the most heavily affected by the COVID-19 pandemic.

The pandemic brought global travel demand to a near halt in 2020, which only slowly began to recover throughout 2021. That adverse shock to travel demand caused a weakening of demand for commercial aircraft. However, travel demand is recovering, and along with it is demand for aircraft and aircraft parts.

GE said that it expects demand for its aviation products and services to remain strong as global markets continue to recover. However, the company still faces uncertainty in China due to recent COVID-19 outbreaks. It is also dealing with various supply chain disruptions. GE said that it expects its full-year FY 2022 aviation revenue to grow 20% or more.

GE's next earnings report (for Q2 FY 2022) is expected to be released on July 25, 2022.

Article Sources

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  1. General Electric Co. "GE Announces First Quarter 2022 Results," Page 2.

  2. General Electric Co. "GE Announces First Quarter 2022 Results," Page 3.

  3. Visible Alpha. "Financial Data."

  4. TradingView. "Price Chart: GE and S&P 500."

  5. General Electric Co. "Form 10-K for the Fiscal Year Ended December 31, 2021," Page 10.

  6. General Electric Co. "GE Plans to Form Three Public Companies Focused on Growth Sectors of Aviation, Healthcare, and Energy," Page 1.

  7. General Electric Co. "Form 10-K for the Fiscal Year Ended December 31, 2021," Page 7.

  8. McKinsey & Co. "Taking Stock of the Pandemic's Impact on Global Aviation."

  9. Yahoo! Finance. "Earnings Calendar: GE."

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