GE Profit Falls as Revenue Growth Less Than Expected
October 21 2016 - 7:40AM
Dow Jones News
General Electric Co. posted worse-than-expected revenue growth
in its latest quarter, and the industrial giant said it would
increase its stock-buyback program by $4 billion after
disappointing Wall Street in the first half of the year.
The company also said organic orders fell 6% amid a focus toward
industrial businesses and away from banking.
GE's power, aviation and renewable energy segments drove
industrial revenue growth, as transportation and in oil and gas
continued to post declines.
Overall for the September quarter, GE reported a profit of $2.03
billion, or 22 cents a share after the payout of preferred
dividends, compared with $2.51 billion, or 25 cents a share, a year
ago. Excluding items, the company earned 32 cents, compared with 29
cents a year ago. Analysts polled by Thomson Reuters projected 30
cents a share.
Revenue rose 4% to $29.27 billion. Analysts had expected $29.64
billion.
GE said its industrial profit slipped 4.6% to $4.32 billion in
the quarter.
Earlier this year, the conglomerate's lending arm, GE Capital,
successfully shed its designation as a "systemically important"
financial institution—a label that had required the company to
submit to stricter rules and supervision by the Federal
Reserve—after months of shedding assets of the business, long seen
as a distraction by investors who believed it dragged on the
company's share price. GE Chief Executive Jeff Immelt on Friday
said in prepared remarks that its GE Capital asset sales are
"substantially complete."
The company has already bought back $13.7 billion of its own
stock through the first half of the year, ahead of the pace for its
prior $18 billion target for the year. The company has a market
value of roughly $260 billion.
Shares edged down 0.6% to $28.90 in premarket trading. The stock
has fallen 11% in the past three months through Thursday's
close.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
October 21, 2016 07:25 ET (11:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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