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Six Reasons GE Will Beat Estimates


Expect Immelt and Co. to stand and deliver.

General Electric (GE) -- the company that needs no introduction, unless your spaceship just landed -- is due out with its second-quarter numbers tomorrow.

Naturally, the entire civilized world will be sifting through the release to try to determine what to expect going forward, as well as get a handle on what the results might mean for the larger economy.

My thoughts:

1. At the risk of being repetitive, GE has been and will continue to be instrumental in our lives for decades to come. Consider what emanates from the Connecticut-based legend -- everything from appliances to airplane engines to CNBC and a bunch of other big-name brands that are easily recognizable. Unless our hindquarters are perched upon a gaping crater (in which case none of this matters), this company's not going anywhere.

2. Jeffrey Immelt is no dummy. The guy has been under pressure to perform, thanks to the sheer whooping the shares have taken and the tongue-lashing he received courtesy of Jack Welch, the company's former fearless leader. He's going to do everything humanly possible to not only beat the expectations this quarter, but to ensure this company generates big profits in 2009 and beyond.

I don't want to sound like his public-relations guy, but Immelt is focused on building his street cred. He's also a smart, savvy person and has what it takes to lead the company going forward.

3. The stock isn't the incredible value it was when I opined on it in an article back in March.
However, it still trades at a reasonable 11.6 times this year's estimate.

4. The recent pullback from the $13s is more a good opportunity than a concern.

5. It beat expectations in the March quarter. A beat in this quarter would send a big message to the Street that GE is back. Note that the Street is at $0.23 for the second quarter and the revenue estimate is $42.16 billion. Ideally, I'd like to see it beat on both fronts.

6. And the million-dollar question: Do I think GE and Immelt will deliver? I do. I believe it beats and the shares head into next week higher than they are now.

Stay tuned. Tomorrow, I'll be one of those people sifting through the numbers and I plan on reporting back in my daily column, Ticker Shock.

Have a great day!
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No positions in stocks mentioned.

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