Q1 Preview: General Electric (GE) Could See Pressure from Crimped Margins

Shares of General Electric Co. (NYSE: GE) are up 0.8 percent Wednesday ahead of the company's first-quarter earnings report, expected out before the market opens Thursday.

GE is expected to report EPS of $0.80 on sales of $3.62 billion. Last quarter, the Fairfield, CT-based megaconglomerate reported EPS of $0.36 on revenue of $41.4 billion. During the same quarter last year, GE posted EPS of $0.21 on sales of $36.6 billion.

Shares gained 10.5 percent through the quarter and are up about 1.7 percent since.

Data from Bloomberg has 13 analysts with a Buy on General Electric, 9 with a hold, and none suggesting to Sell. The analyst price target average is $23, with a high of $25 and low of $21. Shares have traded in a range of $21.65 - $13.75 over the last 52-weeks.

Analyst Summary

• J.P. Morgan is looking for EPS of $0.29. The firm is expecting continued growth in equipment orders and flattish revs in Energy. Primary risk in Energy comes from margins, "as recent negative pricing on both wind orders (-12% in 3Q and -14% in 4Q) and thermal orders (-5% in 3Q and -11% in 4Q) will start to flow through."
  
  JPMorgan believes equipment orders could be up more than 10% and management could "be incrementally more upbeat on the outlook at Aerospace, HC, and GECS. Negatives include continued price/cost concerns at Energy. Net net, we think positives outweigh the negatives at current valuation and recommend long position into the print."
  
  
• Deutsche Bank sees EPS of $0.30. The firm recently increased its earnings estimate 2 cents to reflect an extra week in the quarter. "we now see the potential for Industrial revenue organic growth - a key metric - to be reported in the 8-10% range (5-8ppts benefit from additional week) and this would likely be well received by the Street."

Stay tuned to StreetInsider.com's EPS Insider section to see our analysis of the highly-anticipated quarterly results withi0 n seconds of the release.

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