Tomahawk, WI 11/15/2013 (BasicsMedia) – That General Electric Company (NYSE:GE) is largely on upside potential is something that the market has failed to get right. Its Q3.13 data delivered on Oct. 18, came above consensus estimates and the stock has jumped 5% since. The company has been rolling out positive decisions lately and these are paying off in good time. A look at the company’s cost reduction efforts reveals a huge success. Then a look at its merge of the financial services and industrial segment tells of a share growth potential in the near term. So while the stock has soared in recent times, the expected growth could drive the share higher.

What cannot escape mention is that performance in the past three months making the most recent quarter was marginal. However, that is expressly offset by the strong backlog that the company is holding in orders. Seeing that backlog orders have increased 19% to $229 billion from the previous quarter entering Q4.13, it becomes clear that the company is cooking market surprise. To this huge backlog, add the billion dollar reduction in cost which effectively improves the company’s cash flow condition.

So how was the third quarter and how different might the fourth quarter be? The answer lies in the analysis of the reported data. GE reported $35.7 billion in revenue and adjusted earnings came in at 36 cents a share; that’ one cent above the Wall Street view on the quarter’s per share earning.

A look at the company’s various segments reveals growth in all the major businesses such as oil & gas and power & water. In the oil and gas segment posted $4.3 billion, indicating 18% increase. Also power and water increased 9%. There is particular growth strengths in these segments and this puts the company on solid profitable environment. What might come as a disappointment is the envision reduction in transportation. For nearly three years now, this segment has been on a slow growth, this is largely due to decline in automotive deliveries which is its main revenue earner. Nonetheless, as the economic picks up the pace again, this strain should ease up and allow the segment to not only attain the much needed growth, but also return profit for the company.

Even as transportation appears weak in terms of revenue, General Electric Company (NYSE:GE) is increasing its exploits in power & water and oil & gas which should keep it reporting in black for the longer term. Beyond the increasing focus on the main businesses for revenue improvement, one strategy that has played a key role in securing the company’s future is bringing together its financial services and industrial businesses because this has resulted in ore than a billion saving in terms of cost. Next year should also see the company save another billion in saving in cost due to the merger which has also simplified regulatory reporting.

As a last note, it’s important to know that in the past years, GE has had higher R&D expenditure which pushed capital cost to about 415 billion last fiscal year. However, over the last quarter, R&D expenditure has leveled and now the company can expect material improvement in its cash flow.

DISCLAIMER: This content is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this report or email is not provided to any individual with a view toward their individual circumstances. While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between the any predictions and actual results. Always consult a real licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment.