GE's Fourth-Quarter Earnings Rise 20% (Update 1)

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Updated from 6:59 a.m. ET with detail on industrial segments and GE Capital.

NEW YORK (TheStreet) -- General Electric on Friday reported a fourth-quarter industrial profit margin of 18.3%, up 100 basis points from a year earlier.

The conglomerate was just shy of hitting its goal of a 70-basis-point improvement for its industrial margin of 2013, which rose 66 basis points from the previous year to 15.72%, excluding acquisitions.

GE reported fourth-quarter operating earnings of $5.417 billion, or 53 cents a share, rising from $4.664 billion, or 44 cents a share, during the fourth quarter of 2013. Fourth-quarter EPS, up 20%, met the consensus estimate among analysts polled by Thomson Reuters.

Revenue for the fourth quarter was $40.382 billion, increasing from $29.162 billion a year earlier.  Fourth-quarter revenue came in ahead of the consensus estimate of $40.224 billion.

For all of 2013, GE reported operating earnings of $16.882 billion, or $1.64 a share, on revenue of $146.045 billion, compared to $16.010 billion, or $1.51 a share, on revenue of $146.684, during 2012.

GE CEO Jeff Immelt said the company "ended the year with strong fourth-quarter earnings and margin growth in an improving but mixed environment."

"We saw good conditions in growth markets, strength in the U.S., and a mixed environment in Europe. We had strong operating performance for the year and are pleased with our execution in 2013, taking $1.6 billion of cost out, growing margins, reducing the size of GE Capital, and returning more than $18 billion to shareholders,"  Immelt added.

Industrial Segments

  • For GE's Power & Water segment, fourth-quarter revenue rose slightly year-over-year to $7.686 billion, but profit was up 9% to $1.897 billion.  For all 2013, the segment's revenue was down 13% to $24.724 billion, while profit was down 8% to $4.992 billion.
  • The Oil & Gas segment saw a 17% year-over-year increase in fourth-quarter revenue to $5.306 billion, while profit was up 24% to $802 million.  The segment's revenue for all of 2013 was up 11% to $16.075 billion, while profit was up 13% to $2.178 billion.
  • Energy Management revenue rose 4% year-over-year to $2.012 billion during the fourth quarter, with profit down 28% to $46 million.  For the full year, segment revenue was up 2% to $7.569 billion, while profit was down 16% to $110 million.
  • The Aviation segment's fourth-quarter revenue was up 13% from a  year earlier to $6.170 billion, while profit rose 20% to $1.251 billion.  For all of 2013, Aviation revenue was up 10% to $21.911 billion, while profit rose 16% to $4.345 billion.
  • Fourth-quarter Healthcare revenue was down 1% from a year earlier to $5.117 billion, while segment profit was up 4% to $1.062 billion.  For all of 2013, Healthcare revenue was down slightly to $18.200 billion, while profit was up 4% to $3.048 billion.
  • GE's Transportation segment saw a 7% year-over-year increase in fourth-quarter revenue to $1.460 billion, while profit rose 11% to $280 million.  For all of 2013, Transportation revenue was up 5% to $5.885 billion, while profit was up 13% to $1.166 billion.
  • For the Appliances & Lighting segment, fourth-quarter revenue rose 6% year-over-year to $2.196 billion, while profit was up 23% to $142 million.  The segment's revenue for all of 2013 was up 5% to $8.338 billion, while profit was up 23% to $311 million.

GE Capital

For GE Capital, 2014 will be a year of transition, as GE's finance arm will spin off its North American consumer finance unit through a transaction that will be tax-free for GE shareholders and include an initial public offering of up to 20% of the equity in the new company. The IPO is expected to be completed "later in 2014," after which General Electric plans to make a complete exit from the consumer finance business by distributing its remaining 80% stake of shares in the new company on a tax-free basis during 2015.

The company also said it might decide to complete the disposal of the consumer finance arm by "selling or otherwise distributing or disposing of all or a portion of its remaining interest in the Retail Finance shares."

GE Capital 's revenue for the fourth quarter was down 5% from a year earlier to $11.077 billion, while its profit rose 38% to $2.493 billion.  For all of 2013, GE Capital's revenue was down 3% to $44.067 billion, while its profit was up 12% to $8.258 billion.

The unit paid $5.985 billion in dividends to the parent company during 2013, including $2 billion during the fourth quarter of 2012.