General Electric (NYSE:GE) does it again. The company just posted quite the impressive quarter. Adjusted EPS came in at $0.39, up 8% from last year, and in line with estimates. Revenues were a mild disappointment, missing consensus by $110 million, though still up 3% Y/Y. The company was also able to improve margins, up 20 basis points in the quarter. On the industrial side, General Electric saw an acceleration, with organic revenues up 5% and segment profits up 9%. The company also was able to increase its order backlog to $24 billion, up $23 billion Y/Y. In contrast to prior periods, every segment posted order growth, with aviation leading the way due to the current ongoing jet engine upgrade cycle.
The Alstom (OTCPK:ALSMY) acquisition is expected to close sometime in 2015 and will be immediately accretive to EPS. These assets are expected to add 6 to 9 cents to 2016 EPS. Furthermore, the Synchrony Financial (Pending:SYF) IPO should happen by the end of the July, a transaction which cannot come soon enough.
As I noted in a prior article, these two transactions are the key to moving General Electric into becoming a pure-play industrial stock, with hopefully a higher valuation being applied by the market. When coupled with the robust free cash flow generation ($3.4 billion YTD), I expect General Electric to continue its double-digit dividend growth streak in 2014. With a current yield of over 3%, the future looks bright for shareholders of this company.
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Disclosure: The author is long GE. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.