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GE revenues top expectations

The company posted revenue that were slightly ahead of expectations and also said it was on target to meet Wall Street estimates for the second quarter.

india Updated: Apr 14, 2006 12:38 IST

Diversified manufacturer General Electric Co on Thursday reported profit growth that met Wall Street's expectations, driven by higher earnings in each of its segments except for NBC Universal.

The company posted revenue that were slightly ahead of expectations and also said it was on target to meet Wall Street estimates for the second quarter.

The company reported first-quarter earnings from continuing operations of $4.04 billion, or 39 cents per share, up 14 per cent from the prior year.

GE's revenue from continuing operations, which factors out areas such as insurance, came in at $37.8 billion, up 10 per cent and above the $37.39 billion expected by analysts.

"This is a typical solid quarter for GE, in line with expectations on earnings and actually slightly above expectations for revenue, which is a catch-up from last quarter when they slightly missed revenue," said Tim Ghriskey, chief investment officer at Solaris Asset Management, of New York, who owns GE shares.

"This should lead to a positive tone to the start of the market today and to the outlook for industrial earnings," Ghriskey added.

US stock futures edged higher after the report. Fairfield, Connecticut-based GE is considered a barometer of the US economy due to the size and scope of its operations.

The world's second-largest company by market capitalization, with businesses ranging from jet engines to NBC Universal entertainment, reported net income of $4.31 billion, or 41 cents per diluted share, compared with earnings of $3.97 billion, or 37 cents per share, a year ago.

During the first quarter GE sold off its stake in insurer Genworth Financial Inc, for a gain of about $2.8 billion, marking its exit from that business.

Equipment orders rose 67 per cent and services orders rose 20 per cent, providing a particular boost for the quarter.

Looking ahead, GE Chief Executive officer Jeff Immelt said the company expects to continue its pace of growth, and forecast earnings per share from continuing operations ranging from 46 cents to 48 cents per share, matching Wall Street estimates.

Full-year earnings per share from continuing operations are expected to rise 13 per cent to 17 per cent.

The company posted double-digit percentage profit growth at five of its six segments, except for NBC, where profits were off 8 per cent. The strongest profit growth came at its commercial finance business, where earnings were up 27 per cent.

Immelt said in a statement the company was improving NBC's performance "based on a diversified business mix and quality programming."

GE shares recently have lagged broad market indicators, including the Dow Jones industrial average, of which GE is a component. GE shares were down 1.7 per cent for the year based on Thursday's New York Stock Exchange close, while the Dow is up 3.9 per cent.