The Surprise Big Winner From GE's Earnings Report
Now that the dust has settled on yet another momentous earnings report from General Electric (NYSE: GE), it's time to dig into the details behind the headlines. The hike in GE's free cash flow guidance and demonstration of improvement in working capital management is undoubtedly a big plus for GE investors, but the really big winner from the earnings report is Larry Culp's former company Danaher (NYSE: DHR). In short, Danaher's deal to buy GE's biopharma business is starting to look like a very good value for Danaher. Here's why.
In a nutshell, the healthcare stock is getting the main growth driver of GE's healthcare business, and it's getting it a great price, too. To see why this is the case, we need to dig into how GE Healthcare makes money. The life sciences business comprises a pharmaceutical diagnostics business (the manufacturing of materials used by radiologists in medical imaging) and the biopharma business being sold to Danaher.
The Goddess of victory, Nike. Image source: Getty Images.
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