Your SlideShare is downloading. ×
Can boeing and ge recover
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

Can boeing and ge recover

2,717
views

Published on

Why Boeing and GE are underperforming the Dow this year.

Why Boeing and GE are underperforming the Dow this year.

Published in: Economy & Finance

0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
2,717
On Slideshare
0
From Embeds
0
Number of Embeds
13
Actions
Shares
0
Downloads
7
Comments
0
Likes
1
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide
  • http://news.medill.northwestern.edu/chicago/news.aspx?id=227231
  • http://boeing.mediaroom.com/2014-04-23-Boeing-Reports-Strong-First-Quarter-Results
  • http://www.ge.com/sites/default/files/ge_webcast_presentation_07182014_0.pdf
  • Transcript

    • 1. Can Boeing and General Electric Recover in 2014?
    • 2. Boeing and General Electric are lagging the Dow The Dow Jones Industrial Average has risen steadily in 2014, but Boeing and General Electric are both in the red, lagging the 28 other Dow components. • One reasons is Boeing’s performance a year ago. The stock was up 81% last year and may have gotten overvalued. • GE is slowly divesting financial assets and has been acquiring energy assets in 2014.
    • 3. Boeing is fighting high expectations Boeing’s drop early this year was due to high expectations after last year’s run. Shares dropped in January after management predicted flat profits in 2014. With shares trading at 22 times earnings, more growth was expected.
    • 4. Orders keep coming The long-term investment thesis keeps getting better for Boeing. • First quarter revenue was up 8% to $20.5 billion. • Core operating earnings jumped 12% to $2.1 billion. • Backlog was $440 billion, including $19 billion added in Q1. • Last week alone, Boeing confirmed $40.2 billion in orders. • Boeing’s market outlook predicts that commercial airplanes will double to 42,180 in service by 2033. • Orders are predicted to be worth $5.2 trillion.
    • 5. Slow going in 2014 The Dow Jones Industrial Average has risen steadily in 2014, but Boeing and General Electric are both in the red, lagging the 28 other Dow components. • One reasons is Boeing’s performance a year ago. The stock was up 81% last year and may have gotten overvalued. • GE is slowly divesting financial assets and has been acquiring energy assets in 2014.
    • 6. General Electric transitions its business General Electric is transforming its business from high exposure to financials to a focus on industrial products that were formally its core. CEO Jeff Immelt has targeted 70% of revenue from industrials. • The transition is tough, but results are starting to improve. • Second-quarter industrial revenue grew 10%, including 6% organically. • The acquisition of Alstom solidifies GE’s position in energy.
    • 7. The IPO of GE’s credit card business GE recently announced plans for the IPO of its credit card business. • GE will sell $3.25 billion of stock in its credit card business IPO and retain majority ownership worth about $17 billion. • Over time, it will divest more of the stock, further reducing exposure to financials.
    • 8. GE’s core is getting stronger As GE makes this transition, it’s betting on the right industries. • CEO Jeff Immelt has made huge bets on energy and aviation, which are both doing well. • Oil and gas revenue was up 20% in Q2, and segment profit rose 25%. • Aviation revenue jumped 15%, and segment profit rose 12%. • GE is benefiting from macro trends of the rise in energy production outside of traditional markets and a boom in commercial aviation.
    • 9. Boeing and GE are down but not out Boeing and GE are both lagging the Dow, but their businesses are fundamentally strong. • Boeing will continue to benefit from the rise in commercial air travel around the world. • General Electric’s bet on energy and aviation will pay dividends for years go come. • Investments in wind and solar are just beginning to show fruit. • Neither stock is cheap at 22 times trailing earnings, but for long- term investors, this underperformance will be temporary.
    • 10. Top dividend stocks that can make you rich.