Its revenue declined 1 percent to $31.68 billion, while industrial plus verticals sales came in at $27.9 billion.
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Nick Heymann, analyst at William Blair, told CNBC’s “Squawk Box” that the report was better than expected and showed the GE’s industrial business now accounts for a greater share of earnings as it moves toward becoming a pure-play name in that space.
The company, viewed as a proxy for the US manufacturing sector, said revenues from its aviation division rose 5% year-over-year for the quarter.
The conglomerate overall reported third-quarter net earnings of US$2.51 billion, or 25 cents per share, compared with US$3.54 billion, or 35 cents per share, a year ago.
Orders plummeted 26 percent and revenue was short of a few analysts’ estimates. Through the exchange and dividends, we are on track to return ~$30 billion to shareowners in 2015.
The results capped a quarter of dramatic portfolio reshaping as GE closed in on the 8.5 billion-euro ($9.64 billion) acquisition of Alstom SA’s energy business and agreed to divest billions of dollars in assets at the GE Capital lending arm. Adjusted earnings, excluding special charges, were 29 cents per share, GE said. GE has urged investors not to fret about the long depressed price of crude oil and its effects on the unit, which makes equipment for drilling, exploration and production. Eleven analysts surveyed by Zacks expected $28.67 billion. “Our GE Capital exit plan is ahead of plan and we expect GE Capital dividends to the parent of around US$3 billion for 2015”, said Jeff Immelt, who is not only chief executive of GE but also the chairman.
In the second quarter, GE’s industrial gross margins increased by 60 basis points year over year to 26.6% and its operating margins increased by 70 basis points to 16.2%.
GE shares fell 0.32 percent to $27.94 in pre-market trading.
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GE shares have climbed 11 percent since the beginning of the year, while the Standard & Poor’s 500 index has dropped roughly 2 percent. He sees shares rising 14% to $32 over the next 12 months.
