GE’s Core Revenue Climbs 6% to $25.8B

The company is facing challenges in its oil and gas business but renewable energy revenues grew 62%.
Katie Kuehner-HebertApril 22, 2016

General Electric reported Friday that revenue from its core industrial businesses grew 6% in the first quarter as the company continued its efforts to divest most of its finance arm.

Core revenue rose to $25.87 billion, with GE booking a 62%  increase in revenue from renewable energy. That segment accounted for 40% of total revenue growth across the company.

GE earned $1.93 billion, or 21 cents per share, from its core businesses, down 2% from $1.97 billion, or 20 cents per share, a year prior. But the earnings beat analysts’ expectations of 19 cents a share.

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Overall for the period, the company lost $98 million, or 1 cent per share, including costs associated with its financial units. GE is selling off a substantial portion of its GE Capital unit as it realigns around software and industrial products.

“GE continues to deliver in a volatile environment and performed well in the first quarter,” CEO Jeff Immelt said in a news release, pointing to the challenges of the oil and gas business amid the oil price slump.

“The value of GE is that we are able to offset this with better performance across the portfolio,” he added.

Some observers were relieved.

“I’m positively surprised that in this environment, with the weakness in oil and gas, they were able to come through with numbers like this,” Jack De Gan, chief investment officer at Harbor Advisory, told CNBC’s “Squawk Box.

International Business Times highlighted the performance of the renewable energy unit. “Those gains proved a bright spot in an otherwise challenging quarter, with headwinds from unfavorable exchange rates and a continued energy slump hammering revenue from oil and gas technologies,” it said.

GE boosted its renewable energy investment last year with its acquisition of a $10 billion power business from France’s Alstom SA.

The company on Friday also reaffirmed its guidance for 2016 of $1.45 to $1.55 earnings per share, 2% to 4% organic growth, margin expansion and returning $26 billion to shareholders. In trading Friday, GE shares were down about 1.5%, at $30.52.