We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
General Electric Take Multiple Debt Restructuring Actions
Read MoreHide Full Article
General Electric Company (GE - Free Report) yesterday communicated plans to restructure its debt profile and hence, further strengthen its financial condition. It is considering debt issuances, tender offerings and repayments to meet this end.
The company’s cash, cash equivalents and restricted cash were $47 billion at the end of first-quarter 2020. The balance included $20 billion secured from the divestment of the BioPharma business to Danaher Corporation (DHR - Free Report) . The divestment was completed by the involved parties on Mar 31, 2020.
It is worth noting here that General Electric’s share price decreased 1.7% on Apr 13, eventually closing the trading session at $7.02.
Inside the Headlines
As noted, the company has offered to issue notes and use the proceeds thereof for its recently announced notes tender offerings. The two actions are expected to have no impact on its leverage position.
General Electric, on Apr 13, commenced its tender offers for 2.250% notes, 4.375% notes, 5.875% notes and 2.342% notes issued by General Electric Capital Corporation. All the notes are due to expire in 2020 and have been assumed by General Electric. Total principal amount outstanding is €1,000 million for 2.250% notes, $1,267 million for 4.375% notes, £500 million for 5.875% notes and $6,107 million for 2.342% notes.
In addition to these, the tender offer is applicable for 2.700% notes due 2022, 0.375% notes due 2022, 1.250% notes due 2023, 3.375% notes due 2024 and floating-rate notes due 2020. The notes were issued by General Electric. Total principal amount outstanding is $3,000 million for 2.700% notes, €1,750 million for 0.375% notes, €1,191 million for 1.250% notes, $750 million for 3.375% notes, and €650 million for floating-rate notes.
The tender offer will expire on Apr 20, while Apr 23, 2020, has been fixed as the settlement date. Notes validly tendered will be purchased by General Electric (or its units/subsidiaries) and hence will be retired and canceled.
Beside issuances and tender offers of notes, General Electric lowered its intercompany debts by $6 billion. For this, the company, on Apr 1, repaid GE Capital from the funds secured from the divestment of the BioPharma business.
GE Capital, in turn, also commenced $9-billion debt (maturing 2020) tender offering and repaid debts worth $4.7 billion.
Apart from these actions, General Electric is involved in refinancing some of its revolving credit facility. Such refinancing measures are part of the company’s normal course of action.
As part of its normal financial management process, the company is refinancing a back-up credit facility that expires in 2021.
Recent Developments Related to Coronavirus Outbreak
General Electric provided preliminary insight into first-quarter 2020 results and suspended projections for 2020 (due to the pandemic) on Apr 9, 2020.
The company predicts first-quarter 2020 results to be weaker than the previously mentioned numbers. Adjusted earnings per share will likely be well below the earlier forecast of 10 cents. Industrial free cash flow is expected to be near ($2) billion mentioned earlier. First-quarter results will be released by the company on Apr 29, 2020, before market open.
The Zacks Consensus Estimate for its earnings per share is currently pegged at 10 cents. The consensus estimate for revenues is pegged at $20.8 billion.
In addition, General Electric has withdrawn projections for 2020. In March, it had predicted Industrial’s organic revenues growth in a low-single-digit range and expansion in adjusted margin (on an organic basis) of 0-75 basis points. Industrial free cash was expected to be $2-$4 billion. Adjusted earnings for 2020 were expected to be 50-60 cents per share.
Zacks Rank, Share Price Performance and Estimate Trend
General Electric currently has a market capitalization of $62.4 billion and a Zacks Rank #3 (Hold).
The company’s share price has decreased 40.8% in the past three months compared with a 23.9% decline recorded by the industry.
In the past 60 days, General Electric’s earnings estimates for 2020 and 2021 have been revised. Currently, the Zacks Consensus Estimate for its earnings is pegged at 40 cents for 2020 and 63 cents for 2021, suggesting declines of 25.9% and 12.5% from the respective 60-day-ago figures.
In the past 60 days, earnings estimates for both companies have been unchanged for the current year. Further, the trailing four-quarter positive earnings surprises for Griffon and Broadwind Energy were 20.34% and 10.42%, respectively, on average.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
General Electric Take Multiple Debt Restructuring Actions
General Electric Company (GE - Free Report) yesterday communicated plans to restructure its debt profile and hence, further strengthen its financial condition. It is considering debt issuances, tender offerings and repayments to meet this end.
The company’s cash, cash equivalents and restricted cash were $47 billion at the end of first-quarter 2020. The balance included $20 billion secured from the divestment of the BioPharma business to Danaher Corporation (DHR - Free Report) . The divestment was completed by the involved parties on Mar 31, 2020.
It is worth noting here that General Electric’s share price decreased 1.7% on Apr 13, eventually closing the trading session at $7.02.
Inside the Headlines
As noted, the company has offered to issue notes and use the proceeds thereof for its recently announced notes tender offerings. The two actions are expected to have no impact on its leverage position.
General Electric, on Apr 13, commenced its tender offers for 2.250% notes, 4.375% notes, 5.875% notes and 2.342% notes issued by General Electric Capital Corporation. All the notes are due to expire in 2020 and have been assumed by General Electric. Total principal amount outstanding is €1,000 million for 2.250% notes, $1,267 million for 4.375% notes, £500 million for 5.875% notes and $6,107 million for 2.342% notes.
In addition to these, the tender offer is applicable for 2.700% notes due 2022, 0.375% notes due 2022, 1.250% notes due 2023, 3.375% notes due 2024 and floating-rate notes due 2020. The notes were issued by General Electric. Total principal amount outstanding is $3,000 million for 2.700% notes, €1,750 million for 0.375% notes, €1,191 million for 1.250% notes, $750 million for 3.375% notes, and €650 million for floating-rate notes.
The tender offer will expire on Apr 20, while Apr 23, 2020, has been fixed as the settlement date. Notes validly tendered will be purchased by General Electric (or its units/subsidiaries) and hence will be retired and canceled.
Beside issuances and tender offers of notes, General Electric lowered its intercompany debts by $6 billion. For this, the company, on Apr 1, repaid GE Capital from the funds secured from the divestment of the BioPharma business.
GE Capital, in turn, also commenced $9-billion debt (maturing 2020) tender offering and repaid debts worth $4.7 billion.
Apart from these actions, General Electric is involved in refinancing some of its revolving credit facility. Such refinancing measures are part of the company’s normal course of action.
As part of its normal financial management process, the company is refinancing a back-up credit facility that expires in 2021.
Recent Developments Related to Coronavirus Outbreak
General Electric provided preliminary insight into first-quarter 2020 results and suspended projections for 2020 (due to the pandemic) on Apr 9, 2020.
The company predicts first-quarter 2020 results to be weaker than the previously mentioned numbers. Adjusted earnings per share will likely be well below the earlier forecast of 10 cents. Industrial free cash flow is expected to be near ($2) billion mentioned earlier. First-quarter results will be released by the company on Apr 29, 2020, before market open.
The Zacks Consensus Estimate for its earnings per share is currently pegged at 10 cents. The consensus estimate for revenues is pegged at $20.8 billion.
In addition, General Electric has withdrawn projections for 2020. In March, it had predicted Industrial’s organic revenues growth in a low-single-digit range and expansion in adjusted margin (on an organic basis) of 0-75 basis points. Industrial free cash was expected to be $2-$4 billion. Adjusted earnings for 2020 were expected to be 50-60 cents per share.
Zacks Rank, Share Price Performance and Estimate Trend
General Electric currently has a market capitalization of $62.4 billion and a Zacks Rank #3 (Hold).
The company’s share price has decreased 40.8% in the past three months compared with a 23.9% decline recorded by the industry.
In the past 60 days, General Electric’s earnings estimates for 2020 and 2021 have been revised. Currently, the Zacks Consensus Estimate for its earnings is pegged at 40 cents for 2020 and 63 cents for 2021, suggesting declines of 25.9% and 12.5% from the respective 60-day-ago figures.
General Electric Company Price and Consensus
General Electric Company price-consensus-chart | General Electric Company Quote
Stocks to Consider
Two better-ranked stocks are Griffon Corporation (GFF - Free Report) and Broadwind Energy, Inc. (BWEN - Free Report) . Both companies currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past 60 days, earnings estimates for both companies have been unchanged for the current year. Further, the trailing four-quarter positive earnings surprises for Griffon and Broadwind Energy were 20.34% and 10.42%, respectively, on average.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>