General Electric Slides on Q1 Revenue Miss

General Electric (NYSE:GE) released its inaugural set of quarterly results for 2021 Tuesday morning, and even though the company beat analyst estimates for profitability, investors weren’t satisfied.

In its first quarter, the sprawling conglomerate’s revenue declined by 12% on a year-over-year basis to $17.1 billion. That was on the back of a 13% decline in total orders. Non-GAAP (adjusted) net profit fell 20% to $828 million, or $0.03 per share.

An aircraft's jet engine being repaired in a facility.

Image source: Getty Images.

So it was a mixed quarter for GE, since analysts tracking the stock had collectively estimated the company would earn just over $17.52 billion on the top line, but only $0.01 in per-share adjusted net profit.

A classic American industrial conglomerate whose big bet on financial services went bust earlier this century, GE continues to struggle with its recovery. It is attempting to become a leaner and more focused company, but more work needs to be done in this area to turn it into a compelling investment.

In its earnings release, the company quoted CEO H. Lawrence Culp as saying, “We are improving our cash performance and profitability, with Industrial free cash flow growth of $1.7 billion year over year, excluding BioPharma, and organic margin expansion across all segments, except Aviation.” That division of the company suffered a 28% revenue decline during the quarter.

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GE reiterated its guidance for full-year 2021, stating that revenue for ITS core Industrial business should see a low single-digit percentage rise compared to 2021. The company’s adjusted earnings are forecast to be $0.15 to $0.25 per share, and Industrial’s cash flow should land at $2.5 billion to $4.5 billion.

On Tuesday, GE stock fell by 0.6%, while the S&P 500 index was basically flat.


This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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