GE's adjusted profit tops estimates, shares rise

[BENGALURU] General Electric Co posted quarterly results that topped expectations on Friday, as earnings from aviation, healthcare and transportation offset weak power and oil-and-gas profits, sending shares sharply higher in premarket trading.

GE earned an adjusted 16 cents per share, up from a restated 14 cents a share a year earlier. Analysts on average had expected 11 cents a share, according to Thomson Reuters I/B/E/S. GE recently restated 2017 results to reflect changes in accounting standards.

"It's an apples-to-apples, 5-cent beat," said Scott Davis, analyst and chief executive at Melius Research in New York. He noted that the figure excludes restructuring costs of about 5 cents a share.

GE also affirmed its forecast for 2018. It expects adjusted earnings of US$1.00 to US$1.07 a share, which also excludes restructuring costs, and adjusted industrial free cash flow of between US$6 billion and US$7 billion.

GE's shares were up 5.4 per cent to US$14.75 in premarket trading, after rising 2.4 per cent on Thursday.

Analysts had forecast GE's profit to decline in the first quarter and some thought Friday's results might fail to meet even those diminished expectations.

But the company's aviation, transportation and healthcare businesses produced double-digit profit growth in the quarter, boosting overall results.

Profit at GE's power business fell 38 per cent on a 9 per cent decline in sales; orders dropped 29 per cent.

"The industry continues to be challenging and is trending softer than our forecast," GE said of the power business.

Profit in GE's oil and gas unit fell 30 per cent, excluding restructuring and other charges, GE said.

Earnings from continuing operations attributable to GE shareholders more than tripled to US$369 million, or 4 cents a share, in the quarter ended March 31, from US$122 million or 1 cent, a year earlier, the company said. Revenue rose 6.6 per cent to US$28.7 billion.

REUTERS