GE industrial first-quarter profit rises, revenue falls on stronger dollar
By Lewis Krauskopf
(Reuters) - General Electric Co's (GE.N: Quote) quarterly industrial earnings rose 9 percent, helped by cost cuts that expanded profit margins, as the U.S. conglomerate banks on manufacturing of jet engines, turbines and other big-ticket products as it unloads most of its finance business.
Revenue fell 1 percent in its industrial segments, hurt by a $950 million hit from the stronger dollar, GE said on Friday. Stripping out the currency drag and the impact from deals, sales rose 3 percent.
Investors have been concerned that GE's targets for the oil business might be too rosy, given the slide in energy prices. But the unit's results held up better than some expected and GE backed its previous forecast for the year, which call for sales to drop as much as 5 percent.
GE shares dipped 0.1 percent to $27.26 in morning trading on the New York Stock Exchange, against broader declines for U.S. stocks.
Overall, GE posted a first-quarter net loss of $13.6 billion, or $1.35 per share. Results were weighed down by about $16 billion in charges tied to its exit of GE Capital assets. The company disclosed last week it was shedding much of its finance business.
Excluding special items, GE posted earnings of 31 cents per share, topping by 1 cent the average analyst estimate, according to Thomson Reuters I/B/E/S.
Sales in GE's oil and gas business dropped 8 percent, with profit down 3 percent. Excluding currency effects and the impact from deals, GE said its oil revenue was flat while operating profit rose 11 percent.
"On the oil and gas side, the revenues hung in there," said Tim Ghriskey, chief investment officer at Solaris Asset Management. But he cautioned, "The weakness in that business might still be ahead of it." Continued...