General Electric stock falls on Q4 earnings

Yahoo Finance Live anchors discuss fourth-quarter earnings for GE.

Video Transcript

BRAD SMITH: Also want to mention GE here this morning. That's another company that reported. And I was actually paying attention to the earnings call on this. Just listened into the webcast for a little bit, and beyond some of the numbers that they reported, what the CEO and some of the executives were saying on the call-- everything from leadership roles-- half of their business leaders are actually new to their roles. Of course, this is also a business that has spinoffs that are moving forward, specifically within that health-care division.

But they've got some orders and revenue. That was up 20% in this most recent quarter. I think going forward from here, what they did say, though, was that the next six months would be challenging, and this really comes back to some of the shifts in timing across the size and complexity of the projects that they're working on with specific customers.

So that little nod warning in the call this morning. But again, at the same time, I was looking at shares, tracking them in tandem with the call, and they still held onto gains premarket as well.

BRIAN SOZZI: Yeah, we saw initially some strength here in GE, but those gains have been reversed. I think the market initially bid up GE shares on what looks to be an improved free-cash-flow outlook this year versus last year. GE looking for $3.4 billion to $4.2 billion in free cash flow this year. That clocked in at about $3.1 billion last year.

But now the reversal maybe part of those comments in the earnings call, Brad, but also for this year GE looking for $1.60 to $2 per share, and earnings consensus, according to Yahoo Finance data, was $2.37. So effectively a warning from GE, not unlike we just heard from 3M.

JULIE HYMAN: Yeah, cash flow was really the story there for so many years. Maybe the focus is now shifting to the bottom line instead.

And what I'm also seeing here as you consider the three parts of GE-- health care, which is now separate, and then you have the power business and the aviation business. Remember, power's going away. It's going to be GE Vernova, and then what will remain eventually will be that aviation business.

The power business is not doing so well. It has been struggling, and it does continue to struggle. So that's something that analysts are commenting on as well. Even though it's going to be separated, for now it's still part of GE, and that part of the business is seeing a little bit of weakness here.

Power revenue up 7.9%, coming in a little bit short of estimates here, whereas you saw aviation revenue beat estimates. Renewable-energy revenue, by the way, is also part of that whole thing, and it's $3.41 billion in revenue there, a 19% drop. So that part of the business is still weaker than analysts have been looking for.

BRAD SMITH: All right, we're going to continue to track shares of GE. Interesting call out on the call. They hope the Bengals win the Super Bowl here, so news you can use.