GE's Jeff Immelt Sees Improving Growth in Second Half of 2016
19 May 2016 - 6:10AM
Dow Jones News
General Electric Co. Chief Executive Jeff Immelt said he is
optimistic about the second half of the year, even as the company
struggles with weak oil prices and sluggish economic growth.
Fueling that point of view, Mr. Immelt said, are stronger orders
for power turbines, an improving markets for renewable-energy
products and better demand in health care.
"We see commitments. We see pipeline. We see big deals under
way," Mr. Immelt told analysts at an investor conference in Florida
on Wednesday. "It's the first time in a long time that the two
biggest health-care markets, being the U.S. and China, are still in
pretty good shape."
Over the past year, Mr. Immelt has been leading the company away
from its reliance on financial services, selling the bulk of its GE
Capital lending arm as part of a pivot back toward industrial
businesses. GE makes turbines for power plants, jet engines,
locomotives and health-care equipment.
The company is about 80% of the way through its exit of GE
Capital, he said on Wednesday, and ahead of schedule. GE says the
financial exits and a parallel move to shed its consumer-credit
unit will return $35 billion in capital to the parent company
through 2018.
Among the positive signs Mr. Immelt cited is improving demand in
GE's two biggest markets for health-care equipment such as MRI
machines, X-ray machines and CT scanners: the U.S. and China. Those
two markets are "kind of off their back" after sluggish
performances in previous years, Mr. Immelt said. He cited a "huge
rail deal in India," and a "very strong orders profile in
power."
He said the company expects to get the bulk of its anticipated
$19 billion in revenue from its power business in the second half
of the year and affirmed that GE is on track to meet its earnings
forecast for the year.
Strong performance in those business units is helping to offset
the continuing pain in GE's oil-and-gas division, which is
aggressively cutting costs and revising some of its previously
booked orders thanks to the widespread pullback in capital spending
in the oil industry.
GE has forecast that operating profit in the oil and gas unit
will fall 30% this year, following a 12% decline in operating
profit in the business in 2015.
Write to Ted Mann at ted.mann@wsj.com
(END) Dow Jones Newswires
May 18, 2016 15:55 ET (19:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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