What Happened?

Shares of industrial conglomerate General Electric (NYSE:GE) fell 8.4% in the morning session after the company reported third-quarter earnings. Going into the print, there were likely elevated expectations, reflected in the stock's 90+% increase year-to-date prior to earnings. Revenue beat, but some underlying segments missed, with Commercial Engines & Services below expectations, for example. Also while EPS beat, operating profit came in slightly below. The company did raise full year guidance, which was a bright spot. Overall, it was a mixed quarter with some positives, but it wasn't enough for the market.

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What The Market Is Telling Us

General Electric’s shares are somewhat volatile and have had 10 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 3 months ago when the stock gained 8.4% on the news that the company reported a nice 'beat and raise' quarter. General Electric beat analysts' revenue and EPS expectations. Notably, the aerospace business recorded "double-digit growth in orders, operating profit, and free cash flow." Management observed encouraging trends as air traffic growth stayed positive, with departures up 9% since the start of the year. The company also raised its guidance for full-year revenue growth, operating profit, and EPS. Zooming out, we think this was still a decent quarter, showing the company is staying on track.

General Electric is up 41.6% since the beginning of the year, and at $178.29 per share, it is trading close to its 52-week high of $194.23 from October 2024. Investors who bought $1,000 worth of General Electric’s shares 5 years ago would now be looking at an investment worth $2,460.

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