General Electric Companys (GE) fourth-quarter sales and cash flow, reported on Thursday, outstripped Wall Street estimates, with earnings rising in the companys aviation, health care and oil-and-gas businesses. On the other hand, GE Power and GE Capital registered a loss.
The company also reached a tentative deal to settle a subprime mortgage case with US regulatory authorities.
General Electric shares closed higher for a second consecutive trading session in New York on Thursday. It has also been the sharpest daily surge since March 12th 2009. The stock went up 11.65% ($1.06) to $10.16, after touching an intraday high at $10.76, or a price level not seen since October 30th ($11.40).
Shares of General Electric Company have risen 34.21% so far in 2019 compared with a 7.87% gain for the benchmark index, S&P 500 (SPX).
In 2018, General Electric’s stock plummeted 56.62%, thus, it underperformed the S&P 500, which registered a 6.24% loss.
Total revenue went up 5% year-on-year to $33.3 billion during the fourth quarter, which exceeded the median forecast by analysts of $32.6 billion.
At the same time, General Electric’s industrial free cash flow was reported at $4.9 billion during the latest quarter compared with $6.8 billion in the year-ago period. Analysts on average had expected free cash flow of $4 billion.
“The only relevant data in the quarterly numbers is that actual sales and the free cash flow from the industrials business were better than expected. The company also settled one of their largest litigations with the DOJ, which is a big relief,” William Blair analyst Nicholas Heymann was quoted as saying by Reuters.
“Net results of actions since Larry Culp took over in October is that things are moving forward and we see risk is improving while liquidity increasing,” Heymann added.
The company said it had earned $0.08 per share during the fourth quarter, after reporting a loss of $1.29 per share in the same period a year ago.
Earnings per share, excluding special items, were reported at $0.17 during the latest quarter, falling short of a consensus of estimates pointing to $0.22 per share.
Meanwhile, General Electric’s struggling power unit reported a loss of $872 million during the fourth quarter, while GE Capital reported a loss of $177 million.
The industrial conglomerate provided no forecast for the full year.
According to CNN Money, the 17 analysts, offering 12-month forecasts regarding General Electric’s stock price, have a median target of $10.00, with a high estimate of $21.00 and a low estimate of $6.00. The median estimate represents an 1.57% downside compared to the closing price of $10.16 on January 31st.
The same media also reported that 10 out of 22 surveyed investment analysts had rated General Electric’s stock as “Hold”, while 9 – as “Buy”. On the other hand, 1 analyst had recommended selling the stock.
Weekly Pivot Levels
By using the traditional method of calculation, the weekly levels of importance for General Electric Company (GE) are presented as follows:
Central Pivot Point – $8.98
R1 – $9.39
R2 – $9.63
R3 – $10.04
R4 – $10.46
S1 – $8.74
S2 – $8.33
S3 – $8.09
S4 – $7.86
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