GE profit falls 44%, but tops forecasts
General Electric reported Friday its third-quarter profit slumped 44 percent to USD 2.4 billion as the conglomerate was hurt by weak results from its finance arm.
Washington: General Electric reported Friday its third-quarter profit slumped 44 percent to USD 2.4 billion as the conglomerate was hurt by weak results from its finance arm.
The company, which makes aircraft engines, energy equipment and owns the NBC Universal media entertainment group, said the profit excluding special items was 27 cents a shares, better than market expectations of 20 cents.
Revenues meanwhile fell 20 percent to USD 37.8 billion, below expectations.
"In a global economic environment that is beginning to slowly recover, GE delivered solid third-quarter business results," GE chairman and chief executive Jeff Immelt said.
"We continue to execute on our plan at Capital Finance, perform well in a slow-growth industrial environment and strengthen the balance sheet with strong cash generation. We are aggressively controlling costs, increasing our industrial backlog while expanding margins, and capitalizing on strong services performance."
All of GE`s segments were profitable including its Capital Finance arm, but the division saw an 87 percent slide in operating income.
"While it remains a tough environment for GE Capital, we are seeing signs of stabilization," Immelt said. "Every segment at GE Capital was profitable with the exception of real estate, which is experiencing a tough environment but where we believe the risks are well understood and manageable."
GE`s Technology Infrastructure unit, maker of transportation and aviation equipment, accounted for USD 1.7 billion in operating profits on revenues of USD 10.2 billion.
The Energy division, which makes wind turbines as well as oil and gas equipment, had a profit of USD 1.6 billion on revenues of 8.9 billion.
NBC Universal`s operating profit was USD 732 million on 4.0 billion in revenues. GE has acknowledged talks on a possible spin-off of the unit, which includes the NBC television network and Universal Studios.
The finance arm managed a profit of USD 263 million in the quarter, down 87 percent from a year ago, with revenues own 30 percent at USD 12.2 billion.
GE took restructuring charges of USD 600 million and said it "continued aggressive cost reductions in the quarter."
Some analysts have warned that cost cuts at many large firms may help profits in the short term but will not sustain profit growth.