GE Profit Falls as Revenue Growth Less Than Expected

By Joshua Jamerson 

General Electric Co. posted worse-than-expected revenue growth in its latest quarter, and the industrial giant said it would increase its stock-buyback program by $4 billion after disappointing Wall Street in the first half of the year.

The company also said organic orders fell 6% amid a focus toward industrial businesses and away from banking.

GE's power, aviation and renewable energy segments drove industrial revenue growth, as transportation and in oil and gas continued to post declines.

Overall for the September quarter, GE reported a profit of $2.03 billion, or 22 cents a share after the payout of preferred dividends, compared with $2.51 billion, or 25 cents a share, a year ago. Excluding items, the company earned 32 cents, compared with 29 cents a year ago. Analysts polled by Thomson Reuters projected 30 cents a share.

Revenue rose 4% to $29.27 billion. Analysts had expected $29.64 billion.

GE said its industrial profit slipped 4.6% to $4.32 billion in the quarter.

Earlier this year, the conglomerate's lending arm, GE Capital, successfully shed its designation as a "systemically important" financial institution -- a label that had required the company to submit to stricter rules and supervision by the Federal Reserve -- after months of shedding assets of the business, long seen as a distraction by investors who believed it dragged on the company's share price. GE Chief Executive Jeff Immelt on Friday said in prepared remarks that its GE Capital asset sales are "substantially complete."

The company has already bought back $13.7 billion of its own stock through the first half of the year, ahead of the pace for its prior $18 billion target for the year. The company has a market value of roughly $260 billion.

Shares edged down 0.6% to $28.90 in premarket trading. The stock has fallen 11% in the past three months through Thursday's close.

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(END) Dow Jones Newswires

October 21, 2016 07:14 ET (11:14 GMT)

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