GE Earnings Top Views Behind Growth in Industrial Segment -- Update

By Chelsey Dulaney 

General Electric Co. said growth in its industrial segment again helped drive better-than-expected earnings in its fourth quarter, as the company continues a multiyear shift away from reliance on financial earnings and toward industrial growth.

"The environment remains volatile, but we continue to see infrastructure growth opportunities," said Chief Executive Jeff Immelt in a news release.

Mr. Immelt is leading GE through a massive portfolio transformation, selling assets that don't fit its image as a global infrastructure company including media, appliances and consumer finance, and investing in ones that do--like oil and gas, power generation and advanced manufacturing.

GE is in the process of splitting off its North American retail finance business, Synchrony Financial, a major step toward shrinking GE Capital. At the same time it is bulking up industrial operations with the acquisition of the energy assets of France's Alstom SA--a $17 billion deal slated to close in mid-2015.

The industrial conglomerate had warned investors last month that revenue and profit in its oil & gas unit could fall as much as 5% in 2015 as the industry contracts. GE officials have warned that aggressive cost reductions could be coming.

In the latest quarter, revenue in the segment fell 6%.

With a large portion of its sales overseas, GE is also exposed to fluctuations in foreign currency, especially the euro.

For the quarter ended Dec. 31, GE posted earnings of $5.15 billion, or 51 cents a share, up from $3.21 billion, or 32 cents a share, year earlier. Operating earnings were 56 cents a share.

Revenue climbed 4% to $42 billion.

Analysts polled by Thomson Reuters had expected per-share operating earnings of 55 cents and revenue of $42.16 billion.

Shares rose 0.4% in premarket trading Friday. Distribution of GE's earnings news release was delayed as the company's site appeared to be having technical problems.

Overall, industrial segment revenues increased 6% to $31.82 billion from a year earlier. Power and water revenues gained 22%, while transportation revenues grew 8%.

GE Capital revenues, meanwhile climbed 4% to $11.51 billion.

Write to Chelsey Dulaney at [e-mail]

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