Earnings Previews: General Electric, GE HealthCare, 3M

After U.S. markets closed on Thursday, railroad operator CSX met the consensus estimate for earnings per share (EPS) and barely missed Wall Street’s revenue estimate. Intermodal (container) volume was down 18% year over year. Shares traded down 4.1% shortly before noon ET on Friday.

Intuitive Surgical reported better-than-expected EPS and revenue, but sales of its da Vinci robotic surgery device did not rise to the level investors were hoping for. Shares traded down 2.6% Friday morning.

Before U.S. markets opened on Friday, American Express beat the analysts’ EPS estimate but missed by about 2.3% on revenue. Year over year, however, revenue was up more than 12% to a record, and EPS reached an all-time high. Credit card spending reached an all-time high, and the company added another $100 million to its credit loss provision, bringing its total backstopping fund to $1.2 billion. That contributed to Friday morning’s share price decline of around 3.3%.

Schlumberger, like Amex, beat on profits and missed on revenue. The EPS beat was a single penny, while adjusted EBITDA rose by 10% sequentially and 28% year over year. Expenses, however, rose 16.7% sequentially and 20.8% year over year. Diluted EPS was higher sequentially but down 47% year over year. The stock traded down 3.3% Friday morning.

No earnings reports of note are due after U.S. markets close Friday or before they open on Monday. Later on Monday, look for results from Cadence Systems, Cleveland-Cliffs and NXP Semiconductor.

These four companies, including one Dow Jones industrial, are on deck to report quarterly results first thing Tuesday morning.

General Electric

Over the past 12 months, shares of General Electric Co. (NYSE: GE) have added nearly 64%, including a jump of nearly 33% for the year to date. Investors have prospered from the company’s spin-off of its healthcare business. The big issue now is the coming spin-off of the remaining energy business. What will be left behind is GE’s aviation business, and that will be the new GE.

Analysts remain bullish on the stock. There are 13 Buy or Strong Buy ratings, along with seven Hold ratings, among the 20 brokerages covering it. At a recent share price of around $111.00, the stock is close to its median price target of $111.50. At the high target of $130.00, the upside potential is 17%. The planned spin-off of the energy business is not expected to fetch the premium that followed the split with GE’s healthcare business.

First-quarter revenue is forecast at $15.15 billion, which would be up 4.6% sequentially but down 18.8% year over year. Adjusted EPS are forecast at $0.46, up 70% sequentially and down 41% year over year. For the full 2023 fiscal year, analysts expect GE to report EPS of $2.05, down 21.8%, on sales of $63.06 billion, down 17.6%. Second-quarter numbers for the prior quarter and the prior year include healthcare operations that were spun off in January 2023.

GE stock trades at 54.2 times expected 2023 EPS, 27.6 times estimated 2024 earnings of $4.02 and 20.8 times estimated 2025 earnings of $5.34 per share. Its 52-week range is $61.88 to $112.15, and GE pays an annual dividend of $0.32 (yield of 0.29%). Total shareholder return for the past 12 months was 109.69%.

GE Healthcare

GE Healthcare Technologies Inc. (NASDAQ: GEHC) began trading on January 3 and joined the S&P 500 index on the same day. Since the spin-off from GE, which retained a 20% stake in the company, shares have added nearly 42%.