General Electric Company (NYSE: GE) and 3M (NYSE: MMM) rallied on Tuesday, paring losses in industrial sector-related exchange traded funds.
The Industrial Select Sector SPDR Fund (NYSEArca: XLI) was 0.5% lower on Tuesday.
Meanwhile, General Electric shares rose 4.6% and 3M shares were up 4.9%. XLI includes a 3.1% weight in GE and 3.1% in MMM.
General Electric maintained that its full-year outlook will touch on the low end of its forecasts due to rising costs associated with inflation and ongoing supply chain issues.
“We are improving delivery, price, and cost performance via lean and decentralization. Notwithstanding this progress, much is still uncertain about the external pressures companies are facing at this moment. We continue to trend toward the low end of our 2022 outlook on all metrics except cash, which is lower due to timing of working capital and Renewable Energy-related orders,” GE Chairman and CEO and GE Aerospace CEO H. Lawrence Culp Jr. said in a note.
On the other hand, the rebound in air travel could support the industrial conglomerate’s main business in aerospace engines.
“The GE team delivered a strong second quarter with growth in orders, revenue, and profit, as well as positive free cash flow. Aerospace was a key driver of our performance this quarter as the industry recovery builds momentum. In higher-margin services, GE delivered double-digit revenue growth, with Aerospace up 47 percent compared to last year,” Culp added.
Meanwhile, 3M provided mixed quarterly results, but traders jumped on the company’s announcement of a planned spinoff of its healthcare business. The new healthcare spinoff is expected to focus on biopharma, healthcare IT, and wound and oral care.
“In a challenging macroeconomic environment, 3M executed well and delivered solid earnings, while continuing to drive growth through investments in large, fast-growing areas,” 3M chairman and CEO Mike Roman said in a note. “Looking ahead, we updated our adjusted full-year expectations largely due to the strength of the U.S. dollar and uncertain macroeconomic environment. We remain focused on innovating for customers, driving operational improvements and advancing our environmental stewardship – while positioning 3M for the future through our plan to spin off our Health Care business and resolve Combat Arms litigation in a manner that is efficient and equitable.”
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