GE Stock Slips on Q4 Revenue Miss, Yet Strong Outlook For 2022

Trade GE Stock Your Capital Is At Risk
Ollie Martin
Updated: 25 Jan 2022

Key points:

  • GE Q4 earnings EPS beat, but revenue miss
  • Supply issues and inflation has negatively affected the company's offshore wind branch
  • Reliance on revenue growth in aviation may prove a lifeline for 2022 investors

Following today’s earnings release from GE, it seems that the industry giant is the latest victim of supply chain disruptions; a seemingly ever-present theme in the recent economic environment. Due to GE’s multiple verticals, the company is increasingly exposed to potential bottlenecks – in this case, issues have increased GE’s lead times and inventory, directly harming its healthcare arm. 

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Again, thanks to inflationary headwinds that have sent markets into turmoil recently, GE’S offshore wind branch has felt the brute force of rising transportation costs and critical commodities such as steel. This wasn’t fresh news for GE investors; the company’s wind branch Siemens Gamesa has cut its financial outlook three times over the last nine months off the back of inflation struggles and a weakening supply chain.

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For Q421, GE’s adjusted earnings hit $0.92 per share, beating the Wall Street consensus estimate of $0.85. However, it was the revenue that didn’t quite hit the mark; coming in at $20.3B, down 3% from last year and missing the $21.5B estimations. 

Although the company has noted that inflation will likely remain a problem throughout the year, plans to split into three public companies have highlighted the importance of their aviation business – which supplies engines for Boeing and Airbus – which recorded a 20% increase in revenue. Investors will be clinging to this lifeline in the face of the other branches suffering from inflationary pressures. 

GE expects an adjusted profit of between $2.80 and $3.50 per share for 2022, in comparison to $1.71 last year – clearly remaining optimistic for the fiscal year to come. GE stock has suffered recently, following numerous outlook cuts and today’s revenue miss – GE is currently trading with a premarket loss of 5.2%

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