Shares of General Electric (GE) opened up 0.6% this morning following the release of its first-quarter results. By 10am, they were down more than 1%. What gives?
Agence France-Presse/Getty Images General Electric reported a profit of 39 cents a share, meeting the Street consensus. It also said it would seek to complete the IPO of its North American consumer finance division, soon to be called Synchrony Financial, by the end of the month.
So why is General Electric falling? Bernstein’s Steven Winoker and Peter Lennox-King call this a “noisy” quarter for General Electric:
Unlike last quarter, this quarter is not so clean. At the end of all the puts and takes on gains and tax rate and other differences, it looks like the company came in about penny below our expectations. We are concerned about the second quarter of equipment order decline and pressure in pricing for that order book outside of Aviation. 20 bp of margin expansion and growth in the quarter for Industrial was nonetheless healthy on the back of that value gap and cost out efforts. We would normally expect near term investor reaction to be muted given all the puts/takes and order rate performance. Synchrony and Alstom appear on track.
Shares of General Electric have dropped 1.3% to $26.26 at 1:33 p.m.
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