GE Digital's Predix, SIG To Drive Innovation In Packaging
Zacks Investment Research | May 30, 2018 06:17AM ET
General Electric Company’s (NYSE:GE) unit GE Digital formed a strategic partnership with SIG to drive digital innovation in food and beverage packaging. SIG is an established provider of packaging systems and solutions for the food and beverage industry.
Per the agreement, SIG will install GE Digital’s Predix Asset Performance Management (APM) and Predix ServiceMax industrial applications in more than 400 customer factories spread across the globe. This will drive unprecedented efficiency, create intelligent solutions and unlock new possibilities for value.
GE Digital’s APM and ServiceMax applications will facilitate SIG to create an end-to-end digital platform that will provide customers with a new insight and data-driven intelligence. SIG and its customers will be able to move on from traditional asset monitoring and predictive service models to redefine supply chain, boost quality control technologies and evolve portfolio.
The digital service model will also allow SIG to offer new solutions and business models that are built on advanced performance metrics including as-a-service delivery, performance-based and subscription solutions.
The initial deployment is expected to go live in July 2018 with the global rollout anticipated to begin in January 2019.
Consumers are increasingly looking for innovative as well as convenient products that are safe, sustainable, differentiated and affordable. On the other side of the equation, producers are grappling with competitive pressures, supply chain complexities and short production cycles. This creates the ideal environment for technologies that enable producers to quickly identify, foresee and act on shifting consumer and market demands.
Our Take
GE is trying to reshape and revamp overall structure through a number of specific and tactical steps, centred on simplifying current business model. A recent move was the $11-billion merger of its railroad business with Wabtec Corp., a passenger rail transport company.
In order to focus more on core business activities, the company has exited from the financial business and increased investments in key industrial businesses through restructuring, state-of-the-art technology and R&D initiatives. Currently, it has three core segments — power, aviation and healthcare equipment — which require advanced hi-tech products along with high degree of reliability. These products generate higher margins and are likely to contribute to impressive long-term growth.
GE’s shares have lost 21.3% in the past six months, wider than the industry ’s decline of 9.5%.
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Zacks Rank & Stock to Consider
General Electric carries a Zacks Rank #3 (Hold).
A few better-ranked stocks from the same space include Raven Industries, Inc (NASDAQ:RAVN) , Federal Signal Corp. (NYSE:FSS) and Danaher Corp. (NYSE:DHR) , each carrying a Zacks Rank #2 (Buy). You can see .
Raven Industries surpassed estimates in two of the trailing four quarters, with an average positive earnings surprise of 9.8%.
Federal Signal outpaced estimates in the preceding four quarters, with an average earnings surprise of 16.1%.
Danaher surpassed estimates in each of the preceding four quarters, with an average positive earnings surprise of 4.1%.
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