GE 3Q Profits Dip 8.6% on Charges, Slowdown at Finance Arm

By

Published October 18, 2013

| FOXBusiness

Blue-chip conglomerate General Electric (GE) narrowly topped forecasts on Friday even as its third-quarter profits dropped 8.6% amid charges and a revenue slowdown in its finance arm.

Buoyed by the better-than-expected earnings and a record backlog, GE advanced about 2% in premarket trading.

GE said it earned $3.19 billion, or 31 cents a share, last quarter, compared with a profit of $3.49 billion, or 33 cents a share, a year earlier. The results included restructuring and acquisition charges.

Excluding one-time items, it earned 36 cents a share, topping forecasts by a penny.

Revenue dipped 1.5% to $35.73 billion, slightly trailing the Street’s view of $35.96 billion.

"Our third-quarter results were very strong in an improving global business environment," GE CEO Jeff Immelt said in a statement.

GE said its backlog of service and equipment orders grew by $6 billion to a record $229 billion. Orders jumped 19% to $25.7 billion.

“We are winning in the market and are well positioned for 2014. Our overall framework for the year is unchanged,” Immelt said.

GE was hurt by a 5% drop in revenue at GE Capital to $10.67 billion due to planned asset reductions.

The company is reportedly planning to spin off GE Capital, which, if independent, would be the fifth-largest commercial bank in the U.S. 

The conglomerate also suffered a 10% drop in power and water revenue to $6.5 billion and a 3% dip in energy management sales to $1.83 billion.

On the other hand, GE reported an 18% jump in oil and gas revenue to $4.32 billion and a 12% gain in aviation sales to $5.36 billion.

Shares of Fairfield, Conn.-based GE gained 2.07% to $25.19 ahead of Friday’s opening bell, putting them on track to extend their 2013 advance of 17.6%.

URL

http://www.foxbusiness.com/industries/2013/10/18/ge-hit-by-finance-arm-investors-cheer-record-backlog/