By Erin McCarthy
General Electric Co. said its first-quarter profit declined 15%
as the conglomerate's financing arm posted a notable drop in
revenue.
At a time of weak revenue growth, GE and its competitors have
aimed to eke out more profit by cutting costs and improving
productivity. GE also has sought to shrink the size of its
financing arm and has been under pressure to improve the
performance of its industrial businesses.
GE said Thursday that it is on track to achieve its goal of $1
billion or more in structural cost-out for the year. Its industrial
structural costs decreased $254 million in the first quarter
compared with the year-earlier period, it said.
The company has invested in developing new industrial operations
such as oil and gas, while shedding financial assets such as real
estate and stakes in international banks. Last year, the company
outlined plans to exit the retail lending business, and in March,
GE filed for an initial public offering of its North American
retail finance business, which will operate under the name
Synchrony Financial.
"The environment is consistent with our expectations, with a
positive bias," Chief Executive Jeff Immelt said in a statement.
"GE is in good shape."
He added the company saw strength in most markets, including
power and water, aviation and oil and gas.
Overall, GE reported a profit of $3 billion, or 30 cents a
share, down from $3.53 billion, or 34 cents a share, year earlier.
Operating earnings were 33 cents a share, down from 39 cents a
share.
Revenue declined 2.2% to $34.18 billion. Analysts polled by
Thomson Reuters had recently expected operating earnings of 32
cents a share and $34.36 billion in revenue.
Revenue from GE's industrial businesses, which include energy
infrastructure and aviation, rose 8.3% to 24.55 billion, helped by
double-digit revenue gains in its oil and gas and power and water
units. The oil and gas unit's revenue jumped 27% to $4.31 billion,
while the power and water unit's top line climbed 14%.
Infrastructure orders for the quarter were flat at $23.7
billion. GE's backlog of equipment and services at the end of the
quarter was $245 billion, compared with $216 billion a year
earlier.
GE added that revenue in the industrial segments from "growth
markets" abroad rose 7% during the quarter.
Meanwhile, revenue from GE Capital fell 8.3% to $10.52 billion,
as the company has worked to reduce the size of the segment. Its
real estate unit saw the sharpest decline in revenue, which slid
62% to $631 million from a year earlier.
Write to Erin McCarthy at erin.mccarthy@wsj.com
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