General Electric, Still Weighed by Energy, Boosts Profit Amid Cost Cutting Plan
By Joshua Jamerson
General Electric Co. said Friday it boosted profit from its core industrial businesses, though it was still weighed by its oil and gas segment, amid its vow to cut costs amid investor unease over its performance.
GE in March pledged to cut $1 billion in industrial expenses for each of the next two years, which is twice the level of cuts originally laid out by GE Chief Executive Jeff Immelt in a January earnings call. The cost-cutting was stepped up following discussions with activist investor Trian Fund Management, which The Wall Street Journal previously reported has been frustrated by missed profit goals.
GE said Friday total revenue and profit in the first quarter -- typically relatively slow for GE, which sees more business later in the year -- beat Wall Street expectations.
In recent years, the company has turned focus to its industrial businesses, shedding low-margin units like home appliances and striking a big oil-and-gas deal with Baker Hughes Inc. last fall. Still, analysts are wary that GE will reach a long-term goal of delivering $2 a share in profit in 2018.
A problem for GE during the first quarter continued to be energy. Oil-and-gas revenue fell 9% and segment profit fell 33%.
The Boston conglomerate reported several bright spots in other parts of its business, such as a 22% increase in revenue in the company's renewable-energy business, which includes wind turbine sales. Also, revenue from its largest industrial segment, which makes turbines for power plants, rose 17%. Total industrial profit operating profit rose 11%.
Over all for the March quarter, GE reported net income of $653 million, compared with $228 million a year ago. On a per-share basis, which in the latest quarter was aided by a lower outstanding share count, GE earned 7 cents, compared to a year-ago loss of a penny. On an adjusted basis, earnings were 21 cents a share; analysts, polled by Thomson Reuters, projected 17 cents a share.
Revenue slipped 1% to $27.66 billion, topping analysts' projections for $26.41 billion.
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(END) Dow Jones Newswires
April 21, 2017 07:40 ET (11:40 GMT)Copyright (c) 2017 Dow Jones & Company, Inc.