General Electric Co posted quarterly results that topped expectations yesterday, as earnings from aviation, healthcare and transportation offset weak power and oil-and-gas profits, sending shares sharply higher.
GE affirmed its forecast for 2018 earnings and cash flow, and said it expects to book as much as $10bn in proceeds from divesting industrial assets this year. Those comments eased concern that GE would post poor results.
GE’s profit reflected 7% revenue growth and vigorous cost cutting. Revenue rose in aviation, oil-and-gas and healthcare, offsetting declines in power, transportation, lighting and renewable energy.
GE sliced $1bn in costs, including $800mn in industrial structural costs. GE’s shares were up 4.8% to $14.66 after rising 2.4% on Thursday.
The stock has lost more than half its value in the past last year. But GE also took a $1.5bn reserve charge for potential costs associated with its discontinued WMC mortgage business, formerly part GE Capital.
The US Department of Justice has been investigating the activities of GE’s former mortgage unit during the subprime mortgage crisis, since 2015.
GE said settlement discussions with the DOJ in March and analysis of other banks’ reserves prompted it to take the charge, but it sees limited impact to results. “We do not expect this to change our view on GE Capital with regards to cash and liquidity,” GE chief financial officer Jamie Miller said on a conference call with analysts. Excluding adjustments, GE earned $369mn, or 4 cents a share, on revenue of $28.7bn.


Baker Hughes
General Electric Co’s Baker Hughes posted quarterly profit that beat Wall Street estimates yesterday as improving oil prices prompted companies to ramp up oil and gas production.
US crude futures climbed 7.5% in the first quarter of 2018, re-energising oil and gas producers that held back investments in recent years amid a steep drop in prices. That boost has benefited service companies, among the hardest hit by the oil price downturn that started in mid-2014.
“Market fundamentals remain supportive, as crude oil prices are relatively rangebound, providing stability to customers as they evaluate projects,” said Baker Hughes chief executive officer Lorenzo Simonelli in a statement.
Excluding items, GE Baker Hughes earned 9 cents per share, beating analysts’ estimates by 3 cents, according to Thomson Reuters I/B/E/S.
Revenue rose to $5.40bn from $5.32bn on a combined basis a year earlier.
Results were boosted by a $124mn benefit from US tax reform in December 2017. Less than a year ago conglomerate General Electric Co combined its oilfield business with Baker Hughes, creating the second largest oilfield services company by revenue. The combined company achieved $144mn in synergies in the first quarter of 2018, putting it on track to hit an expected $700mn by year-end, Simonelli said. Shares were up 0.8% at $33.99.
Net income attributable to the company was $70mn, or 17 cents per share, in the quarter.