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GE Beats Estimates, Revenue Falls (Update 2)

  • First-quarter operating earnings of $4.1 billion, or 39 cents a share, rising 14% year over year
  • Earnings beat consensus estimate of 35 cents
  • Revenue of $35 billion beats the consensus estimate of $34.513 billion
  • Industrial revenue down 6% year over year, Power & Water down 26%
  • Small gains from sale of NBC Universal to Comcast, but cash hoard grows to $90 billion from $77 billion at end of 2012
  • GE Capital pays $447 million Q1 dividend to parent company

Updated from 10.57 a.m. ET with market close information, updated total return and price ratios and comment from BernsteinResearch analyst Steven Winoker and comment from JPMorgan Chase analyst C. Stephen Tusa.

NEW YORK ( TheStreet) -- General Electric (GE - Get Report) on Friday reported a 6% year-over-year decline in first-quarter industrial revenue, with Power & Water revenue down 26%.

The Fairfield, Conn., industrial and financial giant reported first-quarter operating earnings of $4.059 billion, or 39 cents a share, compared to $4.666 billion, or 44 cents a share, in the fourth quarter, and $3.567 billion, or 34 cents a share, during the first quarter of 2012.

The first-quarter operating profit beat the consensus estimate of 35 cents, among analysts polled by Thomson Reuters.

First-quarter consolidated revenue from continuing operations totaled $35.010 billion, coming in ahead of the consensus estimate of $34.513 billion. Total revenue declined from $39.327 billion the previous quarter and from $35.080 billion a year earlier.

GE CEO Jeff Immelt said "equipment orders were strong in the quarter, growing 10%, with Oil & Gas orders up 24%, and Aviation up 47%," said GE Chairman and CEO Jeff Immelt. "In growth markets, equipment and service orders grew 17%. We ended the quarter with our biggest backlog in history."

The company said the gain from the sale of its remaining stake in NBCUniversal to Comcast (CCV) was small, at "$0.04 per share above the cost of Industrial restructuring and other charges." But the NBCUniversal sale for $18.1 billion added significantly to the company's cash and equivalents, which totaled $90 billion as of March 31, increasing from $77 billion at the end of 2012.

GE continues to make moves to grow its energy business and increase its percentage of revenue from industrial operations. The company on April 8 agreed to purchase oil drilling equipment manufacturer Lufkin Industries (LUFK) for $3.3 billion in cash.

Industrial Revenue Decline

Total industrial revenue was down 6% year-over-year, to $34.209 billion in the first quarter. Immelt said, "Power & Water markets were worse than we expected. While we anticipated significantly fewer wind and gas turbine shipments, we saw additional pressure in European Power & Water services. This weakness also had a negative impact on margins."

The CEO went on to say that the company "always anticipated that the first half of 2013 would be our toughest comparison; we expect Power & Water to improve during the year and be positive in the second half."
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