GE industrial profit rises despite flagging oil unit sales
By Lewis Krauskopf
(Reuters) - General Electric Co reported a 9 percent rise in quarterly industrial profit on Friday as its businesses that sell power-generating turbines and jet engines helped offset weak sales in its oil and gas unit.
Investors have been concerned that plunging oil prices will hurt GE's sales of oil equipment if customers slash spending. Orders in the unit also fell.
"It’s going to be an albatross ... as long as energy prices stay low," said Tim Ghriskey, chief investment officer of Solaris Asset Management. “The sentiment on GE is very negative here, and I don’t see anything in the quarter that is going to change that."
GE Chief Executive Officer Jeff Immelt said the U.S. conglomerate, which is shifting its focus even more to industrial operations and away from finance, recognized the risks from low oil prices. But he pointed to other areas of strength, including the improving U.S. economy.
"The GE world remains balanced," Immelt said on a conference call with analysts. "Our job is to manage the company through volatility."
Fourth-quarter net income rose 61 percent to $5.15 billion, or 51 cents per share, from a year earlier, when results suffered from GE's move to resolve financial obligations to Japan's Shinsei Bank.
Excluding pension-related costs, earnings of 56 cents per share were 1 cent ahead of the analysts' average estimate, according to Thomson Reuters I/B/E/S.
Revenue rose 4 percent to $42 billion, just missing Wall Street estimates of $42.16 billion. Continued...