General Electric Co yesterday posted a record backlog of orders that the company said positioned it well for 2014, lifting shares and overshadowing a decline in quarterly profit and revenue.
Chairman and chief executive Jeff Immelt sounded an optimistic tone to end a week of economic uncertainty during the debt ceiling debate in Washington, saying the conglomerate’s results were “very strong in an improving global business environment.”
Its backlog for everything from jet engines to locomotives to turbines jumped nearly 13% compared with the year-ago quarter. Earnings increased at six of GE’s seven industrial businesses, and the company said it was on track to achieve its target for expanding profit margins for the year.
Net income fell to $3.19bn, or 31 cents per share, in the third quarter, from $3.49bn, or 33 cents per share, a year earlier.
Excluding one-time items, earnings of 36 cents per share topped the average estimate of analysts by a penny, according to Thomson Reuters I/B/E/S.
Revenue fell 1.5% to $35.7bn. Analysts looked for nearly $36bn.
Revenue was weighed down by its GE Capital finance arm, which the company is shrinking, and a $132mn toll from the negative impact of foreign currency translation.
The company’s accumulated backlog of service and equipment orders rose to $229bn, up $6bn from the second quarter. Equipment orders for its aviation division nearly doubled in the quarter, while transportation equipment orders jumped 65%.
Textron
Cessna maker Textron Inc’s profit fell 31% in the third quarter and the company warned on business jet deliveries in 2013 as small business owners delay spending.
“Demand continues to be soft in the light-to-mid size business jet segment,” Chief Executive Scott Donnelly said on a post-earnings conference call. “Based on the current state of the business jet market, we are taking a more conservative view of Cessna full-year deliveries.”
The company lowered its full-year profit forecast to $1.75-$1.85 per share from $1.90-$2.10.
Textron, which also makes Bell helicopters and EZ-Go golf carts, said softer margins at the Bell business also contributed to the forecast cut.
The company’s income from continuing operations fell to $98mn, or 35 cents per share, in the quarter ended Sept. 28, from $142mn, or 48 cents per share, a year earlier. Total revenue dropped 3.3% to $2.9bn.
Ingersoll
Ingersoll-Rand, the maker of Trane air conditioners and Thermo King refrigeration units, reported better-than-expected quarterly results, helped by rising demand for heating and cooling systems in a rebounding US housing market. Revenue in the division that makes Schlage and Kryptonite locks rose 9% to $609mn.
Sales in Ingersoll’s industrial technologies business, which makes compressed air systems, tools, fluid power equipment and golf and utility vehicles, rose 3% to $722mn.
Third-quarter net income fell 48% to $165.9mn, or 56 cents per share, from $321.6mn, or $1.03 per share, a year earlier. Revenue rose 4.3% to $3.75bn.
Excluding items, the company earned $1.16 per share from continuing operations. Analysts on average had expected earnings of $1.10 per share on revenue of $3.73bn, according to Thomson Reuters I/B/E/S.
Ingersoll said it expects fourth-quarter adjusted earnings from continuing operations of 85 cents to 90 cents per share, falling short of the average analyst estimate of 94 cents.
Schlumberger, Baker
Steadily growing drilling activity in US offshore waters and overseas gave a bigger-than-expected lift to quarterly profits at oil services companies Schlumberger Ltd and Baker Hughes Inc, marking a clear divide with struggling smaller US competitors.
Schlumberger chief executive Paal Kibsgaard pointed to demand from the Middle East and Asia and drilling off the coast of North America, where prices for onshore services remain suppressed by a natural gas glut.
Schlumberger, the world’s largest oilfield services company, topped analysts’ profit estimates for the eighth consecutive quarter with a 20% rise in earnings.
Schlumberger said net income rose to $1.71bn, or $1.29 per share, from $1.42bn, or $1.07 per share, a year earlier. Revenue increased 11% to $11.61bn. Analysts on average had expected $1.24 per share, according to Thomson Reuters I/B/E/S.
Baker Hughes, the industry No 3, said profit growth was also driven by strong activity in the Middle East and Asia Pacific.
It reported net income growth of 22% to $341mn, or 77 cents per share. Excluding one-time items related to restructuring in Latin America, it earned 81 cents per share, while analysts had expected 78 cents.
Honeywell
US manufacturing conglomerate Honeywell International Inc posted lower-than-expected quarterly revenue and cut its full-year sales forecast yesterday, citing delays in closing sales to some customers.
The company, which makes cockpit electronics and systems to manage the climate and security of large buildings, also raised the bottom end of its full-year profit outlook by 5 cents a share.
Honeywell has been working to increase productivity and cut costs in the past year, part of a wide-ranging plan to improve results.
Honeywell now expects to earn $4.90 to $4.95 per share in 2013. The top end of the forecast matches analysts’ expectations, according to Thomson Reuters I/B/E/S.
The company, though, now expects 2013 revenue of $38.8bn to $39bn, down from a previous forecast of $38.9bn to $39.3bn.
The company posted third-quarter net income of $990mn, or $1.24 per share, compared with $950mn, or $1.20 per share, a year earlier.
Revenue rose 3% to $9.65bn, missing the $9.92bn that analysts expected.
AMD
Advanced Micro Devices Inc posted a 6% decline in personal computer chip sales, dampening hopes that its fast-growing gaming-console business can take up the slack and sending its shares 7% lower.
AMD’s third-quarter results on Thursday beat analysts’ forecasts as the chipmaker benefited from supplying processors for new game consoles like Sony Corp’s PlayStation 4 and Microsoft Corp’s Xbox One, which go on sale in November.
AMD reported a third-quarter net profit of $48mn, or 6 cents a share, compared to a net loss of $157mn, or 21 cents a share, in the year-ago quarter.
Non-GAAP earnings of 4 cents a share beat expectations for 2 cents.
Revenue rose to $1.46bn from $1.27bn in the third quarter last year. Analysts on average had expected $1.416bn, according to Thomson Reuters I/B/E/S.
AMD said fourth-quarter revenue would rise 5%, plus or minus 3%, from the September quarter. That would be about $1.533bn.
Analysts on average had expected revenue of $1.416bn in the third quarter and $1.508bn in the fourth, according to Thomson Reuters I/B/E/S.
Morgan Stanley
Morgan Stanley, which has made a bigger bet on wealth management than any other major US investment or commercial bank, said third-quarter pretax profit at its wealth unit more than doubled to $430mn from last year on asset management fees that hit $1.9bn.
Profit margin, an internal benchmark that chief executive James Gorman has promoted as his measure of success in wealth management, more than doubled from last year to 19%, flat with this year’s second quarter. The measure had stubbornly stayed in single digits for several years despite Gorman’s initial prediction of at least a 20% margin.
Pretax profit in the business rose 187% from a year ago and 32% from this year’s second quarter to $430mn on revenue that increased 8% from a year ago to $3.48bn. Total expenses for the wealth unit fell 5% from a year ago and 2% from the second quarter as spending on integrating Smith Barney ebbed.
The July-to-September quarter, typically a sluggish period in retail brokerage, was the first in which Morgan Stanley owned 100% of the former Smith Barney after buying Citigroup’s remaining 35% interest in the joint venture at the end of June. In last year’s third quarter, Morgan Stanley shared $9mn of the unit’s profit with Citigroup.
Google Inc beat Wall Street’s revenue and profit expectations as its advertising business expanded, while losses deepened at its Motorola mobile phone business.
The world’s No 1 Web search engine said that its Internet business delivered net revenue, which excludes fees paid to partners, of $10.8bn in the third quarter, up 23% from $8.76bn in the year-ago period.
“They were able to grow their revenue pretty substantially, particularly in their own websites, in spite of having lower overall ad prices,” said JMP Securities analyst Ronald Josey.
Google said that paid clicks increased 26% year-on-year during the three months ended September 30, while the average cost-per-click - the price that marketers pay Google when consumers click on their ads - decreased 8%.
Google said it earned $2.97bn, or $8.75 per share in the three months ended Sept. 30, compared to $2.18bn, or $6.53 per share, last year.
Excluding certain items, Google said it earned $10.74 per share, compared to the $10.34 that analysts were expecting, according to Thomson Reuters I/B/E/S.
Google’s consolidated revenue of $14.89bn, compared to the $14.79bn average analyst estimate.
Operating loss at Motorola, Google’s mobile phone business, totalled $248mn during the third quarter, compared to a loss of $192mn in the third quarter of 2012.