General Electric (NYSE:GE) stock jumped 10% after the industrial conglomerate posted Street-beating Q4 results, with CEO Larry Culp describing the company’s healthcare and aviation businesses as “exceptional franchises.”
GE shares were down about nearly 3% to 12.56 apiece by midday trading today, a day after they shot up to $12.94 on the earnings news.
Boston-based GE reported profits of $721 million, or 6¢ per share, on sales of $26.2 billion for the three months ended Dec. 31, 2019, for a bottom-line loss of 16% and a 1% decline in sales compared with Q4 2018.
Adjusted to exclude one-time items, earnings per share were 21¢, three pennies ahead of The Street, where analysts were looking EPS of 18¢ on sales of $25.6 billion.
Chicago-based GE Healthcare was among the company’s businesses with positive growth for the quarter. Healthcare earned $1.183 billion off $5.896 billion in sales, for a bottom-line gain of 1% and a top-line boost of 2%. For the full-year, the business saw profits of $3.896 billion off $21.172 billion in sales, representing gains of 5% and 1% respectively.
“At Healthcare, we operate at the center of precision health,” Culp said during an earnings call transcribed by Seeking Alpha.
Culp noted that growth will continue to be driven by digital innovations. He touted the Revolution Maxima CT scanner, which GE launched at RSNA in Chicago last month.
The company this year expects to close the $20 billion sale of BioPharma to Danaher. “We see opportunity to drive faster Healthcare Systems growth, post the BioPharma sale,” said Culp, who predicted low to mid-single-digit growth going forward.
“We’ll do this through targeted increases in R&D, and prioritizing programs with the highest returns as well as better execution on our safety, quality, delivery and cost reduction efforts,” Culp said.
GE’ expects adjusted earnings per share of 50–60¢ in 2020 — below the 66¢ expected on The Street. The company cautioned that the outlook depended on Boeing’s grounded 737 MAX returning to service; GE provides the engines for the planes.