General Electric's Unit Secures Contract From PowerChina

General Electric Company’s GE business unit, GE Renewable Energy, announced that it secured an onshore wind turbine contract from PowerChina Guizhou Engineering Co., Ltd. Notably, this marks the company’s first onshore wind project with PowerChina. Financial terms of the contract were not disclosed by the parties involved.

Per the deal, GE Renewable Energy will be responsible for delivering 12 of its 2.5-132 low-wind speed turbine units for the Xuanli Qingfeng wind farm located close to Puyang city in China. The construction of the wind farm, which is expected to begin in the fourth quarter, is likely to be commissioned by the end of 2020. As noted, the 30-MW wind farm will facilitate the production of an adequate amount of clean energy to power in excess of 40,000 houses in Henan province, thus, catering to the increasing demand for electricity.

The deal will also involve General Electric to provide two years of maintenance services in the facility. It is worth noting here that the company will manufacture the advanced wind turbines in its Puyang site.

In addition, GE Renewable Energy entered a five-year full-service agreement (“FSA”) deal with Naturgy for the La Rabia Wind Farm based in Spain. Notably, it will offer full preventive and corrective maintenance tasks on 13 Eco-80 turbine units as well as 50 units of the technology at Pehimo Wind Farm.

On the same day, General Electric also announced that it delivered the USS Zumwalt — a full-electric power and propulsion ship — to the U.S. Navy. The ship has been designed by the company’s Power Conversion business.

Zacks Rank, Price Performance and Estimate Trend

General Electric, with a $60.8-billion market capitalization, currently carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the near term, the negative impacts of the coronavirus outbreak on the company’s Industrial (particularly, the GE Aviation unit) and GE capital businesses are concerning. However, a healthy liquidity position as well as cash and cost-related measures is likely to aid the company.

Over the past three months, General Electric’s share price has decreased 11.5% against the industry’s growth of 8.4%.

 

In the past 60 days, the Zacks Consensus Estimate for the company’s earnings has declined 90% to 4 cents for 2020 on account of eight downward estimate revisions against none upward. In addition, over the same timeframe, the consensus estimate for 2021 earnings has trended down 42.9% to 36 cents on seven downward estimate revisions against none upward revisions.

Three companies that compete with General Electric are Honeywell International Inc. HON, 3M Company MMM and Raytheon Technologies Corporation RTX.

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