* Adjusted Q3 EPS 36 cents, meet analyst estimates
* Profit rises 8.3 percent, revenue up 2.8 percent
* Holds full-year outlook steady
* Shares down 1.6 percent
By Scott Malone
Oct 19 (Reuters) – General Electric Co notched an 8.3
percent rise in quarterly earnings, but its shares slipped 2
percent in premarket trading as revenue fell shy of analysts’
expectations.
GE, the largest U.S. conglomerate, said on Friday that sales
at its aviation and healthcare arms declined 1 percent in the
quarter, though analysts noted that overall revenues were hurt
by a rise in the value of the dollar – which serves to diminish
the reported value of foreign sales.
GE, also the world’s biggest maker of electric turbines and
jet engines, stood by its forecast for full-year earnings to
rise at a double-digit percentage rate.
“The global economy is uncertain, and we are prepared for a
variety of economic outcomes,” said Chief Executive Jeff Immelt.
Third-quarter net income increased to $3.49 billion, or 33
cents per share, from $3.22 billion, or 22 cents per share, a
year earlier.
Factoring out one-time items, the profit was 36 cents per
share, meeting the analysts’ average estimate, according to
Thomson Reuters I/B/E/S.
Revenue rose 2.8 percent to $36.35 billion from $35.36
billion. Wall Street expected $36.94 billion.
“The market will see this as a slight disappointment,” after
an upbeat late-September presentation to analysts that led some
investors to expect stronger growth, said Jack DeGan, chief
investment officer at Harbor Advisory Corp in Portsmouth New
Hampshire.
“They met expectations for earnings, and they were light on
revenues. If you add back forex, they beat.”
GE said exchange-rate fluctuations lowered its reported
revenue by $1.1 billion in the quarter.
Its shares fell 1.6 percent to $22.44 in premarket trading,
giving back a little of their significant gains over the past
year.
As of Thursday’s close, GE has climbed some 41 percent over
the past year, reaching levels not seen since the 2008 crisis
and sharply outpacing the 22 percent rise of the Dow Jones
industrial average.
ENERGY UNIT OFFSETS EUROPE
The company experienced the sharpest revenue growth in its
energy infrastructure arm, where sales were up 12 percent.
Immelt had bulked up that business in 2010 and 2011 with an $11
billion wave of acquisitions, largely in the oil and gas sector.
Most major industrials have experienced weak demand in
Europe for their equipment as a result of the continent’s debt
crisis.
GE has been no exception to that trend, though Immelt told
investors late last month that European demand has been no worse
than the company had expected.
“The most important thing out of the earnings report is that
they kept their full 2012 outlook. The fourth quarter, we think,
is going to be challenging for companies, especially on the
revenue side,” said Oliver Pursche, president of Gary Goldberg
Financial Services in Suffern, New York. “Them keeping that
outlook intact is a positive.”
The Fairfield, Connecticut-based company laid out plans last
month to cut its selling, general and administrative costs by
$700 million to $1 billion next year in the face of the
uncertain economic environment.
Immelt has also committed the company to buy back enough
shares to lower its share count below 10 billion – its level in
2008. That year GE sold new shares to raise cash during the
financial crisis.
GE said it has bought back $3 billion worth of shares so far
this year.
Fellow U.S. industrial Honeywell International Inc
reported a better-than-expected 10 percent rise in profit on
Friday.
GE competes with some of the world’s largest and best
financed manufacturing groups, including United Technologies
Corp, Germany’s Siemens AG and France’s
Alstom SA.
