General Electric has released its first financial forecast for 2016. The company says that it expects slow growth next year, but is predicting that it will be able to deliver double-digit gains in earnings per share. The company is estimating that operating profits will fall between $1.45 to $1.55 a share. The average estimate of polled Wall Street analysts is $1.51 a share on revenue of $129 billion.
Economic uncertainty and geopolitical turmoil are having a significant effect on the company’s bottom line. However, the company believes that the strength of its stronger industrial businesses, like jet engines and gas turbines, will offset weakness in its big oil field equipment business. That division has seen its orders drop sharply as oil prices have plummeted.
Since the majority of General Electric’s sales are made overseas, the company expects that the stronger dollar will also impact revenue next year. On Wednesday, the Federal Reserve announced its decision to raise interest rates, which increased the dollar’s value. Jeffrey R. Immelt, the chief executive of General Electric, reassured investors that the dollar’s increasing value was built into the company’s planning.
The company also announced that it planned to spend $18 billion next year buying back its shares, further increasing earnings per share. After the announcement, General Electric shares rose slightly in after-hours trading, closing up 2 percent for the day at $30.98. The company’s shares have increased in value 23 percent so far this year.
The company believes that if global economic growth improves, the top of the profit range could be achieved. The company is also banking on the company’s integration of the electric grid and power-generation assets of Alstom of France going smoothly. The acquisition of the Alstom business for $10.6 billion is the largest industrial deal in the company’s history. General Electric is currently the nation’s largest industrial company.