GE Q1 Estimates Widely Off the Mark

General Electric (GE) reported earnings of $0.44 per share this morning, 7 cents worse than expected. The actual number came in 6 cents worse than the low analyst estimate of $0.50 per share. (See transcript.) GE is known for reporting inline with estimates, so it's no surprise that the stock is down more than 10% in the pre-market on this news.

We looked at the historical consensus Q1 EPS estimate for GE since last November, and it was surprising to see that estimates barely budged, even though estimates for the S&P 500 as a whole fell from expected EPS growth of 10% to -10%. Estimates have come down quite a bit for most stocks and sectors (although many think they haven't fallen nearly enough). They just didn't for GE, and the market is now suffering.

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Comments

[BSCLossMan:]

I'm no expert, but I think if GE was to write down about $20 billion is voodoo securities, the stock price would have risen...witness the insanity with C shares rising more and more the more slime they admit to...

2008 Apr 11 02:40 PM

[User18358:]

I don't get it, didn't GE CEO just buy ton of GE shares. That was such a vote of confidence. Looks like someone is sitting and buying all the shares at 32.x. Hopefully it will go up. Buy, Hold, and Pray..

2008 Apr 11 03:17 PM

[bruin532:]

With a 4% dividend 12% price deduction excellant foreign exposure our national need for infrastructure, alternative energy etc etc etc this is a great entry point. I'm not that bullish on the overall economy but NO ONE knows what tomorrow holds and GE is as safe and more profitable and with more upside than a MM.

2008 Apr 11 10:18 PM

[goatfarmer:]

The yield is a ten year record. The previous high was in February 2003, when the stock was making the second of a double bottom. Check out bigcharts.com. Use the interactive chart option. Select Yield in the 'lower indicator' option and you can see the yield over the last 10 years. Pretty nifty.

2008 Apr 12 06:45 AM

[dtrend:]

I bought 5, 2010 leaps a few weeks ago on GE with a long term perspective, but then the stock was upgraded by analysts. As a result, the chart showed me an unsustainable short-term upward run in the context of a paranoid, profit taking market. I sold before my profit dissapeared. I was amazed by the downside gap. I was lucky. I didn't see THAT coming!

So what now?

In my opinion, there isn't anything wrong with GE that time won't heal. I won't try to catch a falling knife, but I am waiting for some chart structure to indicate an end to this current short term down market (inside of this bear market) and support to be reestablished for GE stock. Maybe it will bounce so fast that GE will leave me behind. Time will tell. I will be watching closely.

2008 Apr 12 07:36 PM