Fin24

GE profit tops Wall Street forecast

2012-04-20 13:40

GENERAL Electric reported first-quarter profit that topped analysts’ expectations, helped by strong sales of jet engines and energy equipment, as well as profit growth at its finance arm.

The largest US conglomerate on Friday reported net income of $3.03bn, or 29 cents per share, compared with $3.43bn, or 31c/share, a year earlier. The results include a $200m charge for an Irish mortgage operations exit.

Factoring out one-time items, earnings came to 34c/share, topping analysts’ average forecast of 33c, according to Thomson Reuters I/B/E/S.

“It’s a really strong quarter,” said Perry Adams, senior vice-president at Huntington Wealth Advisors in Traverse City, Michigan.

“What was most impressive was organic growth. Segment profits were up 14% and 11% of that was from organic growth, just a really solid quarter.”

GE shares rose 1% to $19.36 in premarket trading, from a $19.14 close on the New York Stock Exchange.

Revenue at the world’s largest maker of jet engines and electric turbines also topped forecasts, coming to $35.2bn in the quarter, above the $34.7% Wall Street had anticipated.

That number was down 8.2% from a year earlier, a decline that reflects the continued scaling back of GE Capital and the sale of a majority stake of the NBC Universal entertainment business to Comcast.

Revenue at GE’s industrial businesses was up 14%.

The Fairfield, Connecticut-based company is riding a wave of strong investment in energy production and growing use of its natural gas-fired electric turbines.

That is helping to offset slowing investment, particularly in Europe, in its high end medical imaging devices.
 
Chief executive Jeff Immelt has set a goal of cutting the company’s operating costs this year by about 0.5% of sales, or about $750m. He sees that approach as GE’s best bet to weather what it expects to be a period of prolonged economic instability.