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General Electric Tops Profit Expectations

Stocks in this article: GE

NEW YORK ( TheStreet) -- General Electric (GE) reported third-quarter earnings from continued operations of $3.3 billion, or 29 cents a share, topping the estimate of 27 cents a share by analysts polled by Thomson Reuters.


In comparison, operating earnings were $3.4 billion, or 30 cents a share, the previous quarter, and $2.5 billion, or 22 cents a share, a year earlier.

After factoring in a loss from discontinued operations of $1.1 billion to reserve for claims risk from GE's sale of its Japanese consumer finance business in the third quarter of 2008 and $75 million in dividends on preferred shares, third-quarter earnings to common shareholders were $2 billion, or 18 cents a share, compared with $3 billion, or 28 cents a share,,the previous quarter, and $2.4 billion, or 23 cents a share, during the third quarter of 2009.

Total revenue for the third quarter was $35.9 billion, missing the consensus estimate of $37.54 billion, and declined from $37.4 billion in the second quarter and $37.9 billion a year earlier.

The largest decline in year-over-year revenue was in GE's energy infrastructure division, which was expected by the company and analysts. Profit for the segment, however, was flat at $1.66 billion.

Technology infrastructure profit was $1.47 billion for the third quarter, declining 10% year over year, with a decline in aviation profits reflecting a gain that was recorded in the third quarter of 2009. Declines in aviation and transportation profit were partially offset by a 14% increase in health care profits.

While revenue at NBC Universal was flat from a year earlier, third-quarter profit for the unit declined 15% to $625 million. GE has an agreement in place to sell a 51% stake in NBC to Comcast once regulatory approval is received. The deal is expected to net the company $6.4 billion in cash.

Segment profit for the smaller home & business solutions unit was $104 million -- unchanged from a year earlier -- on a slight decline in revenue.

GE Capital

GE Capital's segment profit for the third quarter was $871 million, increasing from $141 million a year earlier, as an improvement in credit quality enabled the company to reduce the provision for losses on financing receivables to $1.7 billion from $2.9 billion a year earlier.

CEO Jeff Immelt, in a statement Friday, said the company's equipment orders had increased 9% with "strong global demand." GE had $78 billion in cash at the end of the quarter.

-- Written by Philip van Doorn in Jupiter, Fla.

>To contact the writer of this article, click here: Philip van Doorn.

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Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.

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