GE’s Core Industrial Profits Up

Still, the business environment remains one of 'slow growth and volatility," said CEO Jeff Immelt.
Katie Kuehner-HebertJuly 17, 2015
GE’s Core Industrial Profits Up

After subtracting for costs to exit many of its financial services businesses, General Electric’s core industrial profits rose for the second quarter, leading the Fairfield, Conn. company to raise its outlook for 2015.

Overall GE lost $1.36 billion, or 13 cents per share, due mainly to charges related to GE’s decision to sell some $200 billion worth of financial services businesses. Excluding that and other one-time items, the company posted operating earnings of 31 cents per share, beating analysts’ estimates by three cents.

“GE had a strong second quarter, with good industrial organic growth and exceptional cash generation,” GE chairman and chief executive Jeff Immelt said in a press release.

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“The environment remains one of slow growth and volatility, particularly in growth markets, while the [United States] is gradually improving. Our industrial businesses had another quarter of strong EPS growth of 18% and orders up 8%. We continue to execute on our plan to exit GE Capital, with $68 billion in dispositions announced this year, and are on track for our goal of closing $100 billion in 2015.”

The company raised its 2015 industrial operating EPS guidance to $1.13–1.20 per share, and confirmed that “GE Capital verticals” were on track for earnings of $0.15 per share.

A Reuters story said that  now that the company is moving away from financial services, investors are focused on GE’s core industrial business of manufacturing jet engines, power turbines, and other large-ticket items.

“These are good numbers,” Solaris Asset Management chief investment officer Tim Ghriskey told Reuters. “The organic growth rates were quite compelling in various parts of the industrial segment.”

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