General Electric Company (NYSE:GE) revealed its earnings for the three months ending June 30 this morning before the market opened. The firm showed earnings of $36 cents per share for the three month period on revenue of $35.12 billion. General Electric Company (NYSE:GE) stock closed at $23.63 per share on Thursday afternoon.
In the same three months of 2012, the company managed to earn 38 cents per share on revenue of $36.5 billion. Analysts following the company were looking for earnings of 35 cents per share on revenue of $35.5 billion from this morning’s earnings report.
Outlook is king
General Electric Company (NYSE:GE) will host a webcast to discuss this morning’s earnings report at 8:30 am EST this morning. Analysts and investors will more than likely be most interested in the company’s outlook for the rest of 2013 in the course of the call. An industrial company as big as General Electric acts as a bellwether for the entire economy.
The blade is two sided, however. General Electric Company (NYSE:GS) is a measure of the power of the world economy, but it suffers when the world suffers, and right now the world isn’t looking good.
Europe, which General Electric Company (NYSE:GE) relies on for sales from its wind turbine segment, has been underperforming for years. Without that continent picking up, GE is unlikely to see its results pick up in 2013, and it could last longer than that.
Performance lag for General Electric
General Electric Company (NYSE:GE) shares have been underperforming for years. The company’s shares are still 15 percent below where they were five years ago. In 2013, a banner year for the wider stock market, General Electric shares have added 14 percent to their value. In the same period the S&P 500 gained more than 18 percent.
Long term General Electric shareholders are hurting, and today’s results are not going to convince them that the future of the company is in safe hands. The immensity of GE and the complexity of its many businesses make it analogous to an investor with an incredibly diversified portfolio. Gains are dampened as you widen your range, and shareholders in the firm are more familiar with that than most right now.