General Electric Q3 Adj. Organic Profit Excl. Renewable Energy Reserves Rises; Revenue Growth At 7%

General Electric Company (GE) reported third-quarter adjusted profit margin of 5.8%, down 190 bps organically from prior year. Excluding Renewable Energy higher warranty and related reserves of $0.5 billion, adjusted profit margin was 8.5%, up 80 bps organically. Adjusted revenues were up 7% organically with a decline in organic orders of 7%.

GE Chairman and CEO and GE Aerospace CEO Lawrence Culp, Jr. said, "Our team is delivering, with strong Aerospace performance in the third quarter, fueled by the improving commercial backdrop and our progress managing operations and the supply chain environment. We are building broad-based momentum with solid revenue and free cash flow results, as well as services growth in all businesses."

For full year 2022, GE is maintaining its prior outlook for organic revenue, trending toward the low end of the high-single-digit growth range. The company now expects 125 to 150 basis points of adjusted organic profit margin expansion and an adjusted earnings per share range of $2.40 to $2.80, primarily driven by the third quarter Renewable Energy warranty and related reserves. The company estimates free cash flow of approximately $4.5 billion.

GE noted that its planned spin-offs remain on track with GE HealthCare ready to go in the first week of January.

GE reported third-quarter adjusted profit per share of $0.35 compared to $0.53, prior year. Adjusted earnings per share excluding Renewable Energy reserves was $0.75 compared to $0.53.

On average, 18 analysts polled by Thomson Reuters expected the company to report profit per share of $0.46, for the quarter. Analysts' estimates typically exclude special items.

Continuing loss was $150 million or $0.14 per share compared to profit of $593 million or $0.54 per share, prior year.

Total revenue was $19.1 billion, an increase of 3%. Adjusted revenues were $18.4 billion, an increase of 7% organically. Analysts on average had estimated $18.62 billion in revenue. Total orders were $20.0 billion, down 9%.

Shares of General Electric are up 2% in pre-market trade on Tuesday.

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