GE Reports 15% Rise in Revenue--Update

By Anne Steele 

General Electric Co. posted a 15% rise in revenue and better-than-expected earnings in the most recent quarter as the company continues to shift its focus toward industrial businesses and away from banking.

GE shares, up 22% over the past year, fell 1.8% to $31.99 in premarket trading as the company also reported a 2% decrease in orders -- a 16% slide on an organic basis, excluding the acquisition of Alstom SA assets -- and described the current business environment as "a volatile and slow-growth economy."

The company said its power, aviation and health-care segments offset challenges in transportation and in oil and gas, but that it expects to see strong organic growth in the second half of the year.

Over all for the period ended June 30, GE reported a profit of $2.89 billion, or 36 cents a share, compared with a loss of $1.36 billion, or 17 cents a share, a year earlier. Including costs related to the payments of preferred stock dividends, the company had earnings of $2.74 million.

Revenue rose to $33.49 billion from $29.23 billion.

Excluding the finance businesses being wound down, GE reported a profit of 51 cents a share, while revenue came in at $24.4 billion. Analysts polled by Thomson Reuters had forecast earnings of 46 cents a share, excluding those businesses.

GE said its industrial profit slipped 5.4% to $4.1 billion in the quarter.

Last month, 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 said Friday that the GE Capital exit plan has enabled it to return $15 billion in dividends year to date, and the company's de-designation as a systemically important financial institution gives it more balance sheet flexibility.

"We will continue to invest in key growth initiatives such as GE Digital, while returning [about] $26 billion to investors through buyback and dividends," GE Chief Executive Jeff Immelt said.

Profit in its oil-and-gas business dropped 48% as revenue there skidded 22%. GE has warned that revenue and profit would fall in the oil-and-gas business as crude prices continue to tumble.

Transportation profit tumbled 18%. Profit in the power and aviation segments, meanwhile, rose 9% and 6%, respectively.

Last year, GE acquired Alstom's power business in a deal valued at $9.5 billion.

Write to Anne Steele at [e-mail]

(END) Dow Jones Newswires

July 22, 2016 08:10 ET (12:10 GMT)

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