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General Electric Company’s GE Power Services business revealed new capabilities which will augment the performance and reliability of other original equipment manufacturer (OEM) gas turbine fleets. The conglomerate also disclosed that it had secured more than $200 million in backlog for gas turbine cross-fleet orders.
GE’s advanced capabilities and technology will provide gas plant operators greater flexibility, reliability and efficiency. It will also ensure longer maintenance intervals and superior overall performance. The gas turbine cross-fleet capabilities also include remote monitoring capabilities to boost reliability as well as availability and reduce operational risks and maintenance costs.
These latest technological developments benefit from the company’s extensive experience as well as the extensive steam turbine, generator and HRSG other-OEM capabilities and expertise acquired from Alstom’s power business in November 2015.
GE Power is the largest segment of the conglomerate in terms of corporate revenues. However, the unit has been a drag on earnings in the last few quarters, thanks to increasing global demand for renewable energy sources. Also, overcapacity, lower utilization and fewer outages are other factors that are dampening demand. Per Industry experts, the acquisition of Alstom’s assets further compounded the problems for General Electric, as it hiked operating costs and contracted margins.
Nevertheless, in 2017, Flannery assured investors that energy, aviation and healthcare will continue to be the focal points of GE’s operations. It has been nearly five months since Flannery outlined his plan to divest more than $20 billion of assets.
In April, GE inked an agreement to sell a trio of its health-care information technology businesses to private equity firm Veritas Capital for $1.05 billion. The deal marks one of the first notable portfolio-related moves since Flannery announced the plan to exit at least $20 billion of businesses.
The overhaul, coupled with cost cuts and cultural changes, encompass Flannery’s attempts to pull GE out of one of the deepest slumps in the company’s 126-year history. The company’s shares have lost 15.2% in the past six months, wider than the industry’s decline of 5.2%.
Zacks Rank & Stocks to Consider
General Electric carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the same space include Honeywell International Inc. HON, Federal Signal Corporation FSS and Danaher Corporation DHR, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Honeywell surpassed estimates in the trailing four quarters, with an average positive earnings surprise of 1.5%.
Federal Signal outpaced estimates in the preceding four quarters, with an average earnings surprise of 16.1%.
Danaher surpassed estimates in each of the preceding four quarters, with an average positive earnings surprise of 4.1%.
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Danaher Corporation (DHR) : Free Stock Analysis Report
Honeywell International Inc. (HON) : Free Stock Analysis Report
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Federal Signal Corporation (FSS) : Free Stock Analysis Report
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