GE Revenue Rises, Lifted by Oil and Gas (Update 1)

Tickers in this article: GE
  • Third-quarter operating earnings of $3.7 billion, or 36 cents a share.
  • Earnings down 3% year-over-year, but EPS flat because of share buybacks.
  • Earnings beat consensus estimate of 35 cents.
  • Revenue of $35.7 billion misses consensus estimate of $36.0 billion.
  • Industrial revenue up 2% year-over-year, Oil & Gas up 18%, Power & Water down 10%.
  • GE Capital pays $2.0 billion dividend to parent company.

Updated fro 7:41 a.m. ET with market reaction and comment from Deutsche Bank analyst John Inch.

NEW YORK ( TheStreet) -- General Electric on Friday reported 11% industrial profit growth year-over-year, while industrial revenues were up 3%.

The Fairfield, Conn., conglomerate reported third-quarter operating earnings of $3.699 billion, or 36 cents a share, compared to $3.685 billion, or 36 cents a share, in the second quarter, and $3.798 billion, or 36 cents a share, in the third quarter of 2012.

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

Third-quarter total revenue was $35.725 billion, which was lower than the consensus estimate of $35.955 billion. Total revenue rose from $35.1123 billion in the second quarter, but was down from $36.254 billion in the third quarter of 2012.

The company's "third-quarter results were very strong in an improving global business environment," said GE Chairman and CEO Jeff Immelt. "Orders grew 19% with orders growth around the world. Total segment profit grew 12%, Industrial margins grew 120 basis points in the quarter, and we are on track for planned margin expansion of 70 basis points for the year."

GE's order backlog for industrial products and services grew to $229 billion as of Sept, 30 from $223 billion the previous quarter, marking its largest backlog ever.

Industrial Segments

Total industrial revenues were down 3% from a year earlier, to $25.813 billion in the third quarter, with Oil & Gas showing the largest increase of 18%, while Power & Water showed the largest decline of 10%.

"As expected, our Power & Water business is strengthening in the second half of the year," Immelt said. "Our strategic initiatives are working: growth market orders expanded 22%; service revenues grew 7%; and margins grew significantly, driven by a positive value gap and company-wide simplification efforts. We have reduced Industrial structural costs by approximately $1 billion year-to-date, and will exceed our plan for the year."

For Power & Water segment, third-quarter revenue totaled $6.498 billion, increasing from $5.715 billion during the second quarter, but declining from $7.196 billion during the third quarter of 2012. Third-quarter profit for the Power & Water segment was $1.289 billion, increasing from $1.087 billion the previous quarter and $1.184 billion a year earlier.

Third-quarter Oil & Gas revenue totaled $4.315 billion, up from $3.955 billion the previous quarter and $3.645 billion a year earlier. Oil & Gas segment profit for the third quarter was $519 million, down from $532 million in the second quarter, but up from $469 million in the third quarter of 2012.