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GE profit beats estimates as power revenue jumps

Posted by: Admin | Posted on: July 22nd, 2016 | 0 Comments


NEW YORK General Electric Co (GE.N) on Friday reported a sharp rise in adjusted net income in the second quarter, as its aviation, healthcare and power businesses countered weak demand for oil and gas and transportation equipment.

GE, long considered a bellwether for the U.S. economy, posted adjusted earnings of 51 cents a share, topping the 46 cents that analysts expected, according to Thomson Reuters I/B/E/S.

The figure included a gain of 20 cents a share from the sale of GE’s appliances business to Qingdao Haier Co Ltd (600690.SS), which closed in June. The gain was offset by 9 cents in restructuring costs and other items, GE said.

GE affirmed its 2016 operating forecast and forecast strong growth continuing in the second half.

“The diversity and scale of our portfolio enabled the company to perform well despite a volatile and slow-growth economy,” GE Chief Executive Officer Jeffrey Immelt said in a statement.

Revenue rose 15 percent to $33.49 billion, helped by a 31 percent rise in the power business. Sales from continuing industrial operations, known as organic segment revenue, fell 1 percent to $24.4 billion, less than some analysts expected.

Net profit was $2.73 billion, or 30 cents a share, compared with a loss of $1.36 billion, or 13 cents a share, in the year-earlier quarter.

GE’s order backlog rose 1.3 percent to $320 billion, reflecting a 2 percent rise in services orders to $233 billion, while equipment orders fell 2.2 percent to $86 billion.

GE shares fell 2.4 percent to $31.80 in premarket trading.

With the stock performing well in recent weeks, the second-quarter results “should be sufficient to keep the bulls satisfied,” analyst Deane Dray at RBC Capital Markets wrote in a note. “But we would not expect anything better than a flattish stock performance today, with much depending on commentary” from the company conference call.

During the quarter, GE returned $18 billion to shareholders through stock buybacks.

The company shed its designation as a non-bank systemically important financial institution after divesting most of its GE Capital business. The change is expected to free about $18 billion in capital, which GE had pledged to return to shareholders through buybacks.

The sale of the GE Capital units also positioned GE to take on debt to fund acquisitions and growth.

(Editing by W Simon and JS Benkoe)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/k0Q6wUpPCjk/us-generalelectric-results-idUSKCN102162

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