GENERAL ELECTRIC’S (GE) quarterly profit plunged by almost 50 per cent as slumping economies limited demand for industrial equipment.
Net income from continuing operations fell 47 per cent to $2.9 billion (€2 billion), or 26 cents a share, in the second quarter.
Earnings per share beat analysts’ average estimate of 24 cents as cost cuts and tax benefits helped offset disappointing top-line results. Total revenue slipped 17 per cent to $39.1 billion, short of expectations.
Finding little reason to believe an economic rebound was imminent, GE trimmed its profit forecast for its industrial and media businesses. GE chief executive Jeff Immelt said earnings from the company’s non-financial divisions would be flat this year; in December he had forecast growth of as much as 5 per cent.
While GE’s industrial businesses, which range from aircraft engines and wind turbines to medical machines, boast a record backlog of $169 billion, new equipment orders slipped 42 per cent in the second quarter to $8.5 billion. Service orders rose 2 per cent.
Investors remained wary of GE Capital, whose earnings slumped 80 per cent during the quarter from a year ago. But Mr Immelt said the division was “ahead of schedule” in its timetable to become a more “focused” financial services company and remained on track to be profitable for the year.
Profits also fell in the industrial, technology and media divisions. Only GE’s energy infrastructure unit showed growth. – Copyright The Financial Times Limited 2009
