Thursday 24 April 2014
 
»
 
»
Story

GE upbeat over orders despite fall in income

Washington, October 19, 2013

General Electric Company (GE) has posted a record backlog of orders that the company said positioned it well for 2014, lifting shares and overshadowing a decline in quarterly profit and revenue.
 
Chairman and chief executive Jeff Immelt sounded an optimistic tone to end a week of economic uncertainty during the debt ceiling debate in Washington, saying the conglomerate's results were "very strong in an improving global business environment."
 
Its backlog for everything from jet engines to locomotives to turbines jumped nearly 13 per cent compared with the year-ago quarter.
 
Earnings increased at six of GE's seven industrial businesses, and the company said it was on track to achieve its target for expanding profit margins for the year.
 
"It's slow but steady progress at GE, and that's a good thing," said Tim Ghriskey, chief investment officer at Solaris Asset Management, which owns GE shares. Net income fell to $3.19 billion, or 31 cents per share, in the third quarter, from $3.49 billion, or 33 cents per share, a year earlier.
 
Excluding one-time items, earnings of 36 cents per share topped the average estimate of analysts by a penny, according to Thomson Reuters I/B/E/S.
 
Revenue fell 1.5 per cent to $35.7 billion. Analysts looked for nearly $36 billion.
 
Revenue was weighed down by its GE Capital finance arm, which the company is shrinking, and a $132 million toll from the negative impact of foreign currency translation.
 
Among GE's seven industrial segments, its oil and gas and aviation lines posted revenue increases of 18 per cent and 12 per cent, respectively, offsetting a 10 per cent decline in its power and water unit that makes a variety of turbines.
 
Still, the power and water business, which has been a drag on results, recorded a 9 per cent gain in earnings and performed better than several analysts expected.
 
"The turbine business is looking up," Ghriskey said. "It certainly has taken a hit. But that should improve next quarter and into 2014."
 
The company's accumulated backlog of service and equipment orders rose to $229 billion, up $6 billion from the second quarter. Equipment orders for its aviation division nearly doubled in the quarter, while transportation equipment orders jumped 65 per cent.
 
GE pointed to a roughly $600 million order in the quarter to provide turbomachinery equipment to Russia's Yamal liquefied natural gas project and an order from Air Asia for 528 engines.
 
GE said it was on track to reach its target of expanding operating profit margin for its industrial businesses by 0.7 per cent - to 15.8 per cent this year from 15.1 per cent in 2012.
 
In the third quarter, the profit margin improved by 1.2 per cent from a year ago.
 
"Industrial margins, which is really an earnings driver, were much stronger than expected," said Jack Degan, chief investment officer at Harbor Advisory Corporation, which owns GE shares.-Reuters



Tags: General Electric |

More INTERNATIONAL NEWS Stories

calendarCalendar of Events

Ads

Buy high quality China wholesale Health & Beauty , Electronics, Sports & Outdoors , Computers, Video Games, Toys & Hobbies Cell Phones, Automobiles and other wholesale products directly from reliable Chinese wholesalers or Factories on DHgate.com