General Electric Co.'s (GE) third-quarter earnings fell a
less-than-feared 42% as the GE Capital financial arm was again the
conglomerate's biggest weakness, partially offset by the consumer
and industrial businesses.
Shares were down 0.8% at $16.65 premarket. After hitting an
18-year low in March, the stock was up 4% for the year through
Thursday.
Last year, the bellwether renowned for reliable earnings shocked
Wall Street by missing expectations because of problems at the
financial unit. Those woes led to GE's first dividend cut in 60
years and cost the company its coveted AAA credit rating.
Chairman and Chief Executive Jeff Immelt said Friday that "in a
global economic environment that is beginning to slowly recover, GE
delivered solid" results. While cash generation was strong, and on
pace to top $15 billion at the industrial business this year, "we
are aggressively controlling costs, increasing our industrial
backlog while expanding margins and capitalizing on strong services
performance."
GE posted a profit of $2.49 billion, or 23 cents a share, down
from $4.31 billion, or 43 cents a share, a year earlier.
Restructuring and other items totaled $600 million, or 5 cents a
share.
Revenue decreased 20% to $37.8 billion as revenue at GE Capital
dropped 30%.
A survey of analysts by Thomson Reuters predicted a 20-cent
profit on $39.5 billion in revenue.
GE's operations comprise a wide range of products including
appliances, aviation products, health care products, and its NBC
Universal television unit, making its performance a indicator of
broader economic trends.
GE Capital, which has weighed on results for the last two years,
saw an 87% slump in profit.
Its consumer and industrial operations, which the company had
been relying on to help it through GE Capital's woes, was a pocket
of strength as earnings more than doubled.
The energy-infrastructure business, which makes turbines for
power-generating facilities, and NBC Universal media unit also
helped support the bottom line with 11% and 13% profit growth,
respectively. GE is reportedly working through a deal with Comcast
Corp. (CMCSA) to merge Comcast's cable networks with NBC
Universal.
-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291;
joan.solsman@dowjones.com
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