Here's What to Expect from General Electric This Quarter
General Electric's (NYSE: GE) 2022 results matter. An obvious statement, but it has even more resonance than usual because the company is preparing to begin a breakup in early 2023. As such, management needs to ensure the company and its businesses are in good financial shape to ensure a smooth transition. With this in mind, let's consider what investors can expect from GE's second quarter on July 26th and the rest of the year.
The subtitle says it all. Having already told investors that "We're trending toward the low end of that range" when discussing full-year guidance on the earnings call, investors will likely be expecting the worst when CEO Larry Culp updates investors on the second-quarter call. That's because many of the reasons for weakness in the first quarter (war in Ukraine, COVID-19 restrictions in China, and ongoing global supply chain issues) continued into the second quarter.
That said, it would be a significant plus if GE somehow managed to stay on track to meet its full-year guidance in the second quarter. The guidance given in the investor-day presentation in March called for an adjusted profit of $6 billion to $7 billion and free cash flow (FCF) of $5.5 billion to $6.5 billion. Merely meeting the $5.5 billion target implies a price-to-FCF multiple of just 12.7 times FCF at the end of 2022, based on the current market cap of $70.1 billion.
Source Fool.com
