By Chelsey Dulaney
General Electric Co. on Friday reported better-than-expected
revenue and adjusted profit in its second quarter, as earnings grew
in its core industrials business.
The Fairfield, Conn.-based conglomerate lifted the bottom end of
its earnings outlook for its industrials business to $1.13 to $1.20
a share from its previous guidance for $1.10 to $1.20 a share.
"The environment remains one of slow growth and volatility,
particularly in growth markets, while the U.S. is gradually
improving," said Chief Executive Jeff Immelt in a news release.
General Electric shares, up 7% this year through Thursday's
close, added 2.3% to $27.67 a share in premarket trading.
The results come as GE works to sell off the bulk of its finance
arm and refocus on its industrial business. The decision to exit
finance is the most momentous shift of Mr. Immelt's multiyear
realignment of the company he inherited almost 14 years ago.
GE said Thursday that it has signed $68 billion worth of sales
for the lending business and is on track to meet its goal of
selling $100 billion in assets from by the end of the year. GE
executives have said recently that sales are expected to pick up in
the third quarter of the year.
Meanwhile, two big industrial deals hang in the balance for the
company. GE said Thursday that it has proposed concessions to
European regulators who have raised antitrust concerns about its
$17 billion deal to buy the energy assets of France's Alstom
SA.
The company's $3.3 billion deal to sell its appliance business
Electrolux AB has also been blocked in the U.S. on antitrust
grounds. GE and Electrolux plan to contest a Justice Department
lawsuit, and hope for resolution by the end of the year.
For the second quarter, total industrial revenue was flat at
$26.9 billion, while operating profit increased 5%.
Profit grew in nearly all of GE's industrial segments during the
quarter, with its power & water segment posting 7.8% growth to
$1.22 billion and the aviation unit posting 6% growth to $1.27
billion.
Crude's price slump hit the company, as profit in its oil &
gas business slipped 12% to $583 million. GE sells equipment and
services to oil producers that have cut plans for new projects and
have demanded sharp discounts on existing orders. The company
warned investors late last year that its oil and gas sales and
earnings could fall this year.
Still, GE has said it has confidence in the oil business
long-term, and is planning to ride things out by relying on its
order backlog for exploration and drilling equipment while slashing
costs.
Overall, GE said orders were up 8% for the quarter, boosted by a
37% increase in its aviation segment a 29% jump in the power &
water segment.
The company reported a loss of $1.36 billion, or 13 cents a
share, compared with a profit of $3.55 billion, or 35 cents a
share, a year earlier.
Excluding certain charges, adjusted operating earnings came in
at 31 cents a share. The net loss reflects a $3.75 billion loss
from discontinued operations.
Revenue ticked up 1.5% to $32.75 billion.
Analysts polled by Thomson Reuters had forecast per-share
operating earnings of 28 cents and revenue of $28.7 billion.
GE Capital revenues ticked down 1% to $6.22 billion. The company
said the finance businesses it is keeping are on track to deliver
15 cents per share in earnings this year.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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