GE Industrial Profit Rises, Helped by Aviation


General Electric (NYSE:GE) reported a better-than-expected quarterly profit on Friday, as its businesses producing jet engines and power turbines offset declines in its oil and gas segment.

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The U.S. conglomerate, which is pulling back from financial services, said its third-quarter industrial revenue grew 4 percent, excluding the impact of foreign currency swings and acquisitions.

Orders plummeted 26 percent and revenue was short of some analysts' estimates. GE backed its full-year profit target.

GE shares, up about 10 percent since activist investor Nelson Peltz unveiled a $2.5 billion stake in the company earlier this month, were little changed at $28 in premarket trading, after earlier slipping nearly 2 percent.

"It's a messy report," said Tim Ghriskey, chief investment officer at Solaris Asset Management, which owns GE shares. Still, Ghriskey said GE's 9 percent rise in organic industrial profit represented "great growth."

Fairfield, Connecticut-based GE has been in the midst of an overhaul since April, when it said it would divest some $200 billion worth of its GE Capital financing assets to focus on industrial manufacturing.

More recently, on Tuesday, the company agreed to sell a $30 billion commercial lending and leasing unit to Wells Fargo.

As part of its retreat from financing, GE said on Friday it expects to retire as much as 7 percent of its outstanding floated shares by mid-November, as it completes the spinoff of its former retail finance business, Synchrony Financial. The Federal Reserve earlier this week said Synchrony could function as a standalone company.

GE reported third-quarter net earnings fell 29 percent from a year earlier to $2.51 billion, or 25 cents per share.

Excluding special items, earnings of 29 cents a share exceeded the average estimate of analysts by three cents, according to Thomson Reuters I/B/E/S.

Revenue slipped 1.3 percent to $31.68 billion, with revenue in its oil and gas segment dropping 16 percent amid weakness in crude prices.

Revenue in its aviation segment increased 5 percent, while revenue in its power and water division, its biggest segment, grew 1 percent.

Sanford Bernstein analyst Steven Winoker said GE's industrial revenue came in about $560 million below his estimate.

(Reporting by Lewis Krauskopf in New York; Editing by W Simon and Bernadette Baum)

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