General Electric (GE) saw its revenue and adjusted earnings for the second quarter slip below last year’s results, but the company just beat Wall Street expectations Friday thanks to a 0.9% increase in net income amid lower costs.
Chief Executive Jeffrey Immelt has worked to move the conglomerate further away from its financial arm GE Capital, which U.S. regulators have deemed to be “systematically important” to the U.S. economy, while bolstering GE’s industrial businesses such as industrial power and oil and gas.
In the latest period, GE logged profit growth in six of seven industrial segments and lowered structural costs, while margins across the segments widened by half a percentage point.
Shares were trading 3.5% higher at $24.47 during early morning trading.
“We executed in a business environment that was slightly improved versus the first quarter. Emerging markets remain resilient, and in the U.S. we saw strong growth in orders this quarter,” Immelt said in a statement.
Immelt added that he expects continued margin improvements and higher segment profits in the second half.
GE reported a profit of $3.13 billion, or 30 cents a share, slightly higher than the year-ago period’s $3.11 billion, or 20 cents a share. Operating earnings, which exclude pension costs, fell two cents to 36 cents, a penny higher than Wall Street estimates.
Revenue slid 3.5% to $35.12 billion, missing forecasts for $35.56 billion. Total costs and expenses declined 2.5% to $31.39 billion.
GE’s industrial businesses, including energy infrastructure and aviation, saw revenue fall 0.8% to $25.17 billion, although profit was up 2.4%. Revenue from GE Capital fell 3.3% to $10.98 billion and profit fell 9.4%.