Street consensus says GE would report earnings of 21 cents per share on a revenue of $29.88 billion. However, there are chances that the company may miss these marks in the third quarter due to weak performance in power division, spurred by a turbine blade issue. Though the chief of the Power division Russell Stokes had stated that the issue has been sorted, investors will be curious to know whether this is a recurring glitch.
Meanwhile, the industrial giant will possibly be hoping to offset the weakness in the power unit with strong sales in the aviation and healthcare segments. Thanks to an increase in order receipts as well as favorable market conditions, the aviation unit is expected to outperform during the third quarter. The sector’s performance will be driven by higher worldwide revenue passenger kilometers, besides an upswing in Air Freight volumes.
The Healthcare division will likely provide ample support, riding on the strong sales in the emerging markets. Benefits from the Baker Hughes deal will, meanwhile, lift topline growth in the Oil & Gas segment.
Also, despite some pricing concerns, General Electric expects its smaller unit – Renewable Energy – to rebound in the second half of the year, primarily driven by onshore wind services. The company’s overall performance will depend on how much it is able to balance between the better performing segments with the weak power segment.
In the retrospect, prospects of a rebound are still looking pretty grim for the company, in spite of the restructuring activities and corporate cost-cutting. On the flip side though, there is very little downside left, given that it has lost most of its market valuation over the past two years.