- GE's aviation segment revenue fell short of analyst predictions.
- GE's aviation business is dependent on the airline industry, which was heavily affected by the COVID-19 pandemic.
- The company said that it expects to return to revenue growth in 2022.
|GE Earnings Results|
|Metric||Beat/Miss/Match||Reported Value||Analysts' Prediction|
|Adjusted Earnings Per Share||Beat||$0.92||$0.84|
|Aviation Segment Revenue (B)||Miss||$6.1||$6.6|
GE (GE) Financial Results: Analysis
General Electric Company (GE) reported earnings for Q4 FY 2021 that were mixed compared with analyst predictions. The company reported adjusted earnings per share (EPS) of $0.92, well ahead of consensus estimates of $0.84. However, total revenues were $20.3 billion, short of analyst expectations and a decline of about 3% year over year. Note that GE went through a 1:8 reverse stock split in August 2021. All of our adjusted EPS figures in this story reflect adjustments made to include the current share count.
These results suggest that GE is still in the process of solidifying its recovery following a significant slowdown early in the pandemic.
GE's Aviation Segment Revenue
Investors look to GE's aviation segment revenue as a key metric of the company's overall success. GE's aviation segment designs and manufactures aircraft engines, components, power, and other systems for both commercial and military applications. GE's aviation business is dependent on the airline and aviation industries, both of which are highly recovery dependent.
GE reported aviation segment revenue of $6.1 billion for Q4 FY 2021, an increase of about 4% year over year. Still, this figure missed analyst predictions, which estimated aviation revenue of $6.6 billion for the quarter. This figure is well below pre-pandemic levels, an indication that recovery in this area is ongoing.
GE's Outlook and Stock Performance
In its FY 2022 guidance, GE announced that it anticipates organic revenues to grow in the high-single-digit range. It also expects improvements in adjusted organic profit margin and adjusted EPS of $2.80 to $3.50 for the year. The company predicts that strong aviation segment revenue growth of more than 20% for the year will drive overall performance.
GE shares fell by more than 3% in extended hours trading following the earnings announcement. The company has lagged slightly behind the broader market in the past year. GE has provided one-year trailing total returns of 10.6% as compared with 14.4% for the S&P 500. GE's next earnings report (for Q1 FY 2022) is expected to be released on April 25, 2022.
General Electric Co. "GE Announces Fourth Quarter and Full Year 2021 Results," Page 1.
General Electric Co. "GE Completes One-for-Eight Reverse Stock Split."
General Electric Co. "2020 Annual Report," Page 14.
General Electric Co. "GE Announces Fourth Quarter and Full Year 2021 Results," Page 4.
General Electric Co. "GE Announces Fourth Quarter and Full Year 2021 Results," Page 3.
TradingView. "Price Chart for GE and S&P 500."
Yahoo! Finance. "Earnings Calendar: GE."