GE 1Q earnings fall, outlook strong
New York • General Electric posted lower first-quarter net income than a year ago because last year's results included the sale of NBC Universal.
But the company said its industrial divisions performed well and the economic environment was "positive."
GE said Thursday that it earned $3 billion on revenue of $34.18 billion in the year's first three months, down from $3.5 billion on revenue of $34.94 billion during the same period last year.
On a per share basis, GE earned 30 cents.
Adjusted to reflect continuing operations and to remove the effect of one-time charges, GE earned 33 cents per share, down 15 percent from a year ago.
Analysts had expected GE to earn 32 cents per share, on average, on sales of $34.45 billion, according to FactSet. GE shares were up 2 percent in premarket trading an hour before the market open.
GE has a good view of the world economy because it has manufacturing plants and sales operations around the world. In a presentation to investors, GE reported that European operations performed better than expected while developing nations saw growth. Its U.S. business picked up in March, evidence that the slowdown this past winter was related to frigid weather.
GE sold its remaining interest in NBC Universal last year as part of a plan to focus on building and servicing big, complicated industrial equipment such as aircraft engines, power plant turbines and oil and gas drilling equipment.
The next step for GE will be to complete a public offering of its consumer credit card division, expected later this year.
It's a move that analysts support, and the company has been able to grow its revenue and profit at these industrial divisions in recent quarters.
Christian Mayes, an analyst at Edward Jones, said it will likely be until well into 2015 before GE makes enough progress in its transformation to see strong growth its overall results.
"This is such a huge company that it's going to take a while," he said. "But they are making progress, and seeing some decent growth in the industrial side."
Operating profit from industrial operations rose 12 percent in the quarter, the company said, as strong growth in their bigger units made up for lackluster results in smaller ones.
Oil and gas, power and water, and aviation divisions all posted sharply higher profits. Transportation and appliances slipped, along with the company's tiny energy management division.
But the company is still working to cut costs in what it calls a "simplification" effort. GE said that it cut costs by $254 million in the quarter, on its way to a goal of cutting $1 billion in costs for the year.
Jonathan Fahey can be reached at http://twitter.com/JonathanFahey .