General Electric's earnings could decline for the first time in 5 quarters

General Electric Co is likely to report lower earnings and unchanged revenue in the third quarter because of bottlenecks in the supply chain, drop in demand and shrinking margins. 

GE is likely to report adjusted earnings per share (EPS) fell 18.3% YoY to $0.47, the first decline in earnings in 5 quarters, while revenue was flat at $18.4 billion, according to Visible Alpha's average estimate. 

The company will announce the figures for the third quarter of 2022 ahead of the market open on October 25. 

GE's field of activity once extended to energy, household appliances, financial services and television. As financial performance deteriorated, several executive directors sold many of these businesses in an effort to restart business growth. General Electric Co marked the end of one of America's oldest conglomerates in 2021, planning to spin off its healthcare, renewable energy, power and digital technology businesses in 2023 and 2024. 

Thus, GE will have only one business - aviation. This division is closely linked to the aviation industry, which is recovering from the downturns of the COVID era. Analysts expect that revenue for the quarter grew at the fastest pace in the last 4 years.

GE has reported falling profits for 3 of the last 5 years. After a series of quarterly profit declines or even losses, it has increased profits for the last four consecutive quarters.

Revenue growth has been hit by the company’s restructuring: annual revenue fell for five consecutive years until 2021. Revenue rebounded in the second quarter of 2022, marking the first increase in almost three years.

The company’s aviation business has begun to recover, even though supply chain bottlenecks have hurt parts supplies and delayed jet engine deliveries.

After five consecutive quarters of declines during the pandemic, revenue began to recover in the second quarter of last year. Since that time, General Electric Co has reported revenue growth for four consecutive quarters, including a 26.6% increase in the second quarter of this year, which is the best result in 4 years.