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GE reports US$13.6b loss due to finance sale charges
[NEW YORK] General Electric Friday reported a US$13.6 billion first-quarter loss on charges from its plan to sell most of GE Capital as profits rose in four of seven industrial businesses.
The big loss had been expected after GE said a week ago that it would take about a US$16 billion charge due to the GE Capital divestment. GE reported US$3 billion in profits in the year-ago period.
The plan to sell most of its finance operations is part of an overhaul directed by chief executive Jeff Immelt to emphasize the company's industrial and technological prowess.
In the first quarter, a big gain in aviation profits and smaller increases in transportation, appliances and lighting and health care made up for lower profits from power and water and oil and gas.
Overall industrial profits rose 8.6 per cent to US$3.6 billion.
GE had said April 10 that it would take a charge of about US$16 billion in concert with the GE Capital sale to cover such costs as taxes on repatriated earnings and charges on businesses held for sale.
Friday's earnings were also held back by the drag from the strong dollar, which dented revenues by US$950 million.
"GE performed well in the first quarter, in an environment that remains volatile but with continued growth opportunities in infrastructure," Mr Immelt said.
The plan to divest most GE Capital assets is "a major step in our strategy to focus GE around its competitive advantages," Mr Immelt said. "We are reshaping the company." The results translated into operating earnings per share excluding charges of 31 cents, a penny above analyst expectations.
Revenues were also affected by accounting for the GE Capital sale and fell 12.5 per cent to US$29.36 billion.
GE shares dipped 0.1 per cent in pre-market trade.