Summary
- GE reports earnings October 28th. More revenue declines and segment losses could be in the cards.
- CEO Larry Culp intimated cash flow could grow in the second half of 2020. The company could experience upside from a COVID-19 vaccine.
- I believe cash flow could be soaked up by capital needs to pare debt or support its insurance operations.
- GE remains a sell.
- This idea was discussed in more depth with members of my private investing community, Shocking The Street. Get started today ยป
Source: Barron's
General Electric (GE) reports Q3 earnings Wednesday. Analysts expect revenue of $18.72 billion and EPS of -$0.04. Q3 will exclude results from the sale of BioPharma to Danaher (NYSE:DHR), so we will continue to learn more about the performance of its remaining industrial assets. The pandemic has practically brought business activity to a standstill, hurting corporations like GE. In Q2, the company's industrial businesses - Power, Renewable Energy, Aviation, and Healthcare reported Q2 revenue of $15.9 billion, down 25% Y/Y.
Power has underperformed expectations for the past few years. Orders fell 42% during the quarter, which likely portended future revenue will also fall. Governments around the world have been hard-hit by the pandemic. I expect governments to continue to reduce orders until the pandemic subsides.
