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General Electric (GE), Honeywell (HON) – Earnings Preview

General Electric Company (NYSE:GE) and Honeywell International Inc. (NYSE:HON) are scheduled to report first quarter earnings before the market opens on Friday. Here’s what investors can expect:

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General Electric Company (NYSE:GE)

The consensus of analysts surveyed by Thomson Reuters is for earnings of 30 cents a share. Revenue is forecast to increase $34.32 billion, from $34.18 billion in the year-ago period.

 

General Electric Company (NYSE:GE) had earlier revealed that it will take a $16 billion charge as part of its plan to sell a bulk of its financial services arm. GE Capital has been out of favour with investors for quite some time, who complain that it creates a drag on the company’s more valued industrial business. GE also announced plans to sell around $165 billion in assets over the next two years. Watch out for any more details about those upcoming deals.

Following the offloading of most of its lending business, investor attention will primarily be focussed General Electric Company (NYSE:GE)’s core industrial businesses. Last week, the company reaffirmed its full-year industrial earnings guidance of $1.10 to $1.20 a share, surprising many on the Street,

General Electric Company (NYSE:GE)’s oil equipment and services business will also be in the spotlight amid the increased volatility in crude oil prices. Late last year, the company warned investors that sales and earnings from that division could drop by 5 percent this year. But several analysts are projecting a far steeper drop, with several expecting declines of as much as 20 percent in the segment’s profits this year.

Honeywell International Inc. (NYSE:HON)

Honeywell is expected to report first quarter profit of $1.39 a share, up from $1.28 in the same period last year. The average analysts’ estimate is down from three months ago when it stood at $1.40 a share. Revenue for the quarter is likely to fall 2 percent year-over-year to $9.48 billion. For the full year, the company is forecast to record earnings of $6.10 a share on revenue $40.52 billion.

Honeywell International Inc. (NYSE:HON) has been profitable for eight straight quarters, and the optimism on the Street is high. The company continues to launch new products and technologies, and expand its footprint in new geographical territories. Due to its continued focus on cost and productivity, Honeywell expects organic sales growth to accelerate throughout the year. Overall, the company’s proactive restructuring drive has positioned it to navigate better than many of its peers in the industrial goods space.

A majority of Wall Street analysts rate Honeywell International Inc. (NYSE:HON) as a “buy.”

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