GE first-quarter profit rises to $619mn; oil earnings fall

Higher power and aviation earnings helped General Electric return to profitability in the first quarter as it announced plans yesterday for cost cuts this year and next.But the industrial conglomerate, under pressure from activist Trian Partners to boost profitability, reported lower earnings in the oil and gas business and described conditions in the sector as still challenging despite higher oil prices.“GE had a good quarter in a slow-growth and volatile environment,” chief executive Jeff Immelt said on a conference call with analysts, adding that he sees global growth “accelerating” and the US continuing to improve. Immelt said GE would cut $1bn in costs in 2017 and another $1bn in 2018.The longtime GE chief is being prodded by Trian’s Nathan Peltz to boost returns, sparking speculation Immelt could soon retire.GE reported $619mn in profits in the three months ending March 31, up from a $61mn loss in the year-ago period when it was hit by one-time costs linked to asset sales. Revenues dipped 0.7% to $27.7bn.Operating profits growth was strongest in power, aviation and renewable energy.Executives also touted a large electricity deal in Iraq and a soon-to-be-announced power service deal in the Middle East that chief financial officer Jeff Bornstein described as “a really phenomenal transaction.” But oil and gas remained a weak point, with operating profits falling 33% to $207mn, an indication that the market for oilfield services remains pressured after a two-year slump in oil prices that has abated only in recent months.