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GE Posts Profit Growth in Most Industrial Segments (Update 1)

Tickers in this article: GE
  • General Electric first-quarter operating earnings of $3.7 billion, or 36 cents a share, down 5% from a year earlier.
  • Earnings beat consensus estimate of 35 cents.
  • Revenue of $35.1 billion misses consensus estimate of $35.6 billion.
  • Industrial revenue down 1% year-over-year, Power & Water down 17%.
  • GE Capital pays $1.9 billion dividend to parent company.

Updated from 7:36 a.m. ET with market reaction and comment from Bank of America Merrill Lynch analyst Andrew Obin.

NEW YORK (TheStreet) -- General Electric on Friday reported profit growth in all of its industrial businesses, except for Power & Water

The Fairfield, Conn., conglomerate reported second-quarter operating earnings of $3.685 billion, or 36 cents a share, down from $4.059 billion or 39 cents a share, in the first quarter, and $4.010 billion, or 38 cents a share, in the second quarter of 2012.

The first-quarter operating profit beat the consensus estimate of 35 cents, among analysts polled by Thomson Reuters.

Second-quarter total revenue was $35.1123 billion, missing the consensus estimate of $34.555 billion. Total revenue declined from $36.397 billion a year earlier.

GE CEO Jeff Immelt said the company "achieved Industrial segment profit growth in six of seven businesses, reduced structural costs, and continued to invest in growth," describing a "business environment that was slightly improved versus the first quarter."

Immelt also said in GE's earnings press release that "Emerging markets remain resilient, and in the U.S. we saw strong growth in orders this quarter. Europe is stabilizing but still challenged. We expect margin expansion to continue and segment profits to grow in the second half of the year."

GE's shares were up 5% in morning trading to $24.80.

Industrial Segments

Total industrial revenues were down 1% from a year earlier, to $25.168 billion in the second quarter, with all industrial segments showing year-over-year revenue growth except for Power & Water, which was down 17%, and Healthcare, which was flat. GE said the Power & Water unit's shipments "are expected to strengthen in the second half of the year."

The company also said it had reduced industrial structural costs by $474 million during the first half of the year, and was on track for an industrial profit margin expansion of 70 basis points for all of 2013.

Power & Water segment, second-quarter revenue totaled $5.719 billion, increasing from $4.825 billion in the first quarter, but declining from $6.900 billion during the second quarter of 2012. Second-quarter profit for the Power & Water segment was $1.087 billion, increasing from $719 billion the previous quarter, but declining from $1.303 billion a year earlier.