What happened
Shares of General Electric (GE 1.30%) jumped higher this morning and were up 5.4% as of 10 a.m. ET. Investors in the industrial giant woke up to two big announcements from the company. The fact that these developments came one day ahead of GE's annual investor day juiced up expectations for even bigger things to come from GE on March 10.
So what
General Electric took to social-media platform Twitter to announce its decision to suspend operations in Russia, but said it will continue to provide essential medical equipment and power services in the region. According to GE's latest annual report, the company hasn't provided any information on its operations in Russia, except that it has two subsidiaries in the region, including one in healthcare.
While GE's move to suspend business in Russia isn't surprising, as several large and established global companies have already pulled out, it's the other big announcement from GE that's sending the stock soaring today: In its latest regulatory filing, GE said it authorized a share-repurchase program worth up to $3 billion on March 6.
Image source: Getty Images.
Although the company hasn't decided when or how many shares it'll eventually buy back, it said this share-buyback program is just one of the several potential capital-allocation alternatives the company is considering on an ongoing basis alongside organic and inorganic investments, as it plans to "establish three global, investment grade companies." Investors may recall that GE announced plans to split into three companies last November -- aviation, healthcare, and a company that combines its renewable energy, power, and digital businesses.
What really matters here, though, is GE's buyback announcement. The company has strived to improve its financials in recent years, and its latest share-buyback plan affirms a stronger balance sheet with enough cash to return to shareholders.
GE also just announced the election of three new members to its Board of Directors, including Linde's CEO Stephen F. Angel, former CEO of American Airlines Isabella D. Goren, and the CEO of Cleveland Clinic, Tom Mihaljevic.
Now what
GE is all set to host its much-awaited annual investor-day event on March 10, where management is expected to speak about the health of GE's several businesses and outlook for 2022 and beyond. Importantly, GE should also share details about its plans to split into three companies and how it intends to deploy capital going forward. The already announced buyback program has lifted investor expectations, and that's being reflected in the stock price today.
