General Electric Surges After Shedding Financial Division

Jacob Harper  |

Stock market stalwart General Electric ($GE) rose in Friday trading action after posting earnings that exceeded expectations. While the company has gone through significant changes and consolidation overt he past year – including the spinning off of financial arm Synchrony Financial ($SYF) – the company was able to increase profits and best estimates by some $500 million in revenue.

The oldest stock continuously listed in the venerable Dow Jones Industrial Index, the 136-year-old GE slightly missed revenue estimates but bested earnings per share. This helped reversed a downward trend for the company’s stock that has more or less continued throughout the year.

While GE’s stock has shown steady improvement since the 2008 financial meltdown 2014 hasn’t been as kind, with shares of the company falling 11.27 percent on the year prior to the day’s trading. GE’s surge on the day helped spur a rally for the DJIA, which reversed what had been one of the roughest weeks in recent memory.

Considering their age and size, it takes a lot to move GE one way or the other Analysts took the mixed bag of earnings as a slight positive, looking at GE’s component parts instead of its whole for information. Aviation and new technologies, was singled out for their strengths. Steven Winoker, a Sanford C. Bernstein & Co. analyst, told Bloomberg that “(GE’s) margin expansion is better than I thought it would have been in industrial.”

Guidance was also cited as a positive, with organic revenues expected to rise between 4 and 7 percent for the full year. Following their decision to shed financial, GE is next expected to rid itself of its famous appliance division to focus on the aforementioned, more-profitable industrial section.

In the earnings report, General Electric reported earnings of $3.8 billion, or 38 cents a share, compared with $3.7 billion, or $0.36 a share, the year prior. Revenues were $36.17 billion, compared to $35.85 billion the year prior. Analysts had been expecting profits of $0.37 a share on revenues of $36.79 billion.

After GE's stock rose by as much as 4 percent in early trading action by 3:30 EST GE shares pared back slightly to hit $24.89 a share, for a gain of 2.64 percent.

Stock price data is provided by IEX Cloud on a 15-minute delayed basis. Chart price data is provided by TradingView on a 15-minute delayed basis.

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