FAIRFIELD (dpa-AFX) - Conglomerate General Electric Co. (GE) reported Friday weak earnings in its third quarter, despite increased revenues. Adjusted earnings were sharply lower than market estimates, while top line beat their view. John Flannery, Chairman and CEO, said, 'This was a very challenging quarter. While a majority of our businesses had solid earnings performance, this was offset by a decline in Power performance in a difficult market.'
In pre-market activity, GE shares were losing around 5 percent to trade at $22.45.
Flannery added that the Industrial CFOA for the quarter was down principally because of lower Power volume, resulting in lower earnings and higher inventory. The company expects the new leadership team at Power and the cost actions that are being taken will better position it in 2018 and beyond.
In the third quarter, net earnings attributable to shareowners dropped 10 percent to $1.8 billion from $1.99 billion a year ago. Earnings per share fell 5 percent to $0.21 from $0.22 a year ago.
Earnings from continuing operations were $1.91 billion, down 9 percent from $2.10 billion last year. Earnings per share from continuing operations dropped 4 percent to $0.22 from $0.23 a year ago.
The latest results included impact of $0.16 per share resulting from impairments of $0.13 percent and higher restructuring and lower gains of $0.03
Adjusted industrial operating earnings per share were $0.26, compared to $0.27 last year. Industrial operating + Verticals earnings, on adjusted basis, were $2.6 billion or $0.29 per share, compared to $0.32 per share last year.
On average, 14 analysts polled by Thomson Reuters expected earnings of $0.49 per share. Analysts' estimates typically exclude special items.
In the quarter, pre-tax earnings plunged 29 percent year-over-year to $1.47 billion.
Industrial margin was 7.6 percent, down 240 basis points. Adjusted industrial margin dropped 220 basis points to 11.8 percent.
Total revenues and other income climbed 14 percent to $33.47 billion from $29.27 billion last year. Analysts were looking for revenues of $32.56 billion.
Sales of goods and services fell 10 percent from last year to $29.43 billion. Industrial segment revenues were $26.9 billion, up 10 percent, but it declined 1 percent organically.
In the quarter, power revenues fell 4 percent to $8.68 billion, while oil & Gas revenues climbed 81 percent.
Orders in the quarter increased 11 percent to $29.8 billion from $26.9 billion last year. Organic orders were flat.
Backlog at the end of the quarter was $328 billion, up 3 percent from $319.2 billion last year.
Copyright RTT News/dpa-AFX