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TheStreet Open House

General Electric (GE) Mulls Further Restructuring

Stocks in this article: GE

NEW YORK (TheStreet) -- General Electric (GE) executives, after reporting third-quarter earnings, revealed they would continue restructuring initiatives to boost efficiency.

"We continue to have good opportunities for restructuring throughout the company and I would expect us to do some in the fourth quarter," said CEO Jeffrey Immelt during a conference call. "If we have gains, we expect those to be offset with restructuring."

CFO Jeffrey Bornstein added that the more simplified GE becomes, the more cost-efficient and customer-centric it will be.

"Every day we identify more opportunities to do what we do smarter -- more shared services, a smaller manufacturing footprint, rationalizing capacity, executing our functions in a more consolidated way," he said.

Third-quarter revenue was $35.73 billion, lower than an estimated $35.96 billion and down 1.5% from $36.25 billion a year ago. Restructuring in GE Capital, the company's financial arm, and negative currency exchanges contributed to the decline.

The Fairfield, Connecticut-based company recorded operating earnings 3% lower than the year-ago quarter to $3.7 billion, or 36 cents a share. Excluding restructuring expenses and other one-time charges, operating earnings was 40 cents a share.

GE also reported a record $229 billion of backlog in equipment and services which puts the company in good stead for the fourth quarter and into 2014.

Shares were up 3.5% to $25.55 by market close Friday, leading the S&P 500 which gained 0.65%. 

TheStreet Ratings team rates General Electric Co as a Buy with a ratings score of B. The team this to say about its recommendation:

"We rate General Electric Co (GE) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its expanding profit margins, increase in stock price during the past year, notable return on equity and increase in net income. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

Written by Keris Alison Lahiff.

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