2013 is here, and earnings season has already started ramping up. The key to making smart investment decisions with stocks releasing their quarterly reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed, knee-jerk decision.
Let's turn to General Electric . As one of the strongest performers in the Dow Jones Industrials during 2012, the conglomerate returned to its roots by emphasizing its core industrial businesses and scaling back on areas like its GE Capital division. Let's take an early look at what's been happening with General Electric over the past quarter and what we're likely to see in its quarterly report Friday morning.
Stats on General Electric
Analyst EPS Estimate
Change From Year-Ago EPS
Change From Year-Ago Revenue
Earnings Beats in Past 4 Quarters
Source: Yahoo Finance.
Will GE move the markets?
Analysts have pulled in their consensus estimates for GE somewhat over the past quarter, with initial earnings per share pegged at $0.47. That may explain the stock's drop of about 6% since mid-October. However, a couple of analysts have bucked the trend with upward revisions in the past 30 days.
GE has benefited greatly from its renewed emphasis on industrial applications. For instance, in the energy infrastructure field, GE's wind turbines have a strong position in the market, and the renewal of the production tax credit should bolster further activity in the area. Although industry giants Exelon and NextEra Energy are fighting with dueling lobbying efforts over whether the credit actually helps the industry, GE will enjoy better sales as long as projects get done.
Moreover, investors will be looking for hints on GE's increased acquisition activity. With forays into oil and gas having borne fruit, GE has suggested that the mining-equipment industry could be next, and speculation that Joy Global could be a target has led to substantial debate about whether the Chinese slowdown may finally be turning around.
Despite emphasizing its industrial businesses, GE hasn't given up entirely on finance. Earlier this week, it completed the purchase of $6.4 billion in bank deposits from MetLife, bolstering GE's retail banking division. Clearly, the company is keeping its options open and seeking to make the most of its conglomerate structure to maximize profits wherever it can find them.
As useful as the earnings numbers will be, the most useful information in GE's Friday report will be its discussion of these areas. If GE can successfully tap trends the way it has recently, then its shares have room to run higher.
To get even more information on whether GE is a buy right now, we're offering our best research coverage of the conglomerate in a premium report. Inside, our industrials analyst breaks down GE's multiple businesses and provides reasons to buy or sell GE. You'll also receive continuing updates as major events unfold during the year. To get started, click here now.
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The article Will General Electric's Earnings Move the Dow? originally appeared on Fool.com.
Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends Exelon. The Motley Fool owns shares of General Electric and Joy Global. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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