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General Electric Clinches Two Deals Worth $1.2B in Iraq

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Zacks Equity Research
·3 min read
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General Electric Company GE on Aug 19 announced that it entered two agreements with the Government of Iraq. Notably, the two deals, worth more than $1.2 billion in total, will involve the company to carry out maintenance programs apart from strengthening transmission network in Iraq. In the past couple of days, General Electric’s share declined 2.6% to eventually close at $6.27 yesterday.

Inside the Headlines

Per one of the agreements, worth $500 million, the company’s Gas Power business unit will work on upgrading and maintaining Iraq’s major power plants. The unit’s scope of work includes the deployment of its advanced technology across power plant sites like Basra, Baghdad, Mosul and Karbala to name a few. This will help in maintaining more than 6,000 MW of power supply, thus, catering to the increasing demand for electricity, particularly during summer.

The second agreement, worth $727 million, will involve the company’s Grid Solutions business unit to help Iraq in enhancing its transmission network and interconnection with Jordan’s electricity grid. Notably, its scope of work includes designing, installation testing, and commission of high voltage substations and overhead transmission lines.

In addition to these services, General Electric will collaborate with several export credit agencies for facilitating the financing of more than $1 billion for the projects.

Zacks Rank, Price Performance and Estimate Trend

The company, with a $54.9-billion market capitalization, currently carries a Zacks Rank #4 (Sell).

Over the past six months, its share price has decreased 47.1% compared with the industry’s decline of 6.7%.



In the past 60 days, the Zacks Consensus Estimate for the company’s earnings for 2020 has declined from earnings of 4 cents to a loss of 6 cents, owing to five downward estimate revisions versus none upward. Also, the consensus estimate for its earnings for 2021 has gone down from earnings of 36 cents to earnings of 31 cents due to six downward estimate revisions versus none upward.

Stocks to Consider

Some better-ranked stocks from the same space are Griffon Corporation GFF, HC2 Holdings, Inc. HCHC and Danaher Corporation DHR. While Griffon sports a Zacks Rank #1 (Strong Buy), HC2 Holdings and Danaher carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Griffon delivered an earnings surprise of 117.00%, on average, in the trailing four quarters.

HC2 Holdings delivered an earnings surprise of 41.91%, on average, in the trailing four quarters.

Danaher delivered an earnings surprise of 10.83%, on average, in the trailing four quarters.

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