Updated from 9:48 a.m. EDT
third-quarter earnings jumped 11% from a year ago, reflecting roughly congruent revenue and expense growth and the negative impact of an accounting charge in the 2003 period.
The industrial conglomerate also lifted the low end of its full-year earnings estimate and affirmed a forecast of 10% to 15% profit growth in 2004.
The stock was recently up 26 cents, or 0.8%, to $34.21.
Fairfield, Conn.-based GE earned $4.05 billion, or 38 cents a share, in the three months ended Sept. 30, up from $3.65 billion, or 36 cents a share, last year. Revenue rose 15% from a year ago to $38.27 billion. Analysts had been forecasting earnings of 38 cents a share on revenue of $38.11 billion in the most recent quarter.
The 2003 quarter included an income reduction of $372 million for an accounting change. Before that item, GE's earnings rose 1% in the latest quarter compared with last year, although they fell 5% on a per-share basis. The company's overall expense line rose 17% from a year ago to $33.18 billion, primarily reflecting a jump in cost of sales and overhead expenses to $25.33 billion from $20.25 billion last year.
The company now expects to earn $1.57 to $1.60 a share in 2004, up from the previous estimate of $1.55 to $1.60 a share. Analysts expect $1.58 a share. The company repeated its target for 10% to 15% per-share earnings growth in 2005, a rate that would leave earnings roughly in line with the Thomson First Call consensus of $1.78.
"The economy we see continues to be very strong, with our total orders for the quarter up 27%," said CEO Jeff Immelt, who now-famously proclaimed "the best economy in years" following GE's second-quarter earnings release. "Eight of our 11 businesses delivered at least double-digit earnings growth with continued strong performance on cash flow from operating activities."
In a conference call with Wall Street following the release Friday, Immelt sounded a bit more guarded. He said he expects oil prices to remain high through 2005 and that GE is not counting on a dramatic improvement in the economy.
"We're not counting on any different economy then what we're seeing today," Immelt told analysts. "We're going to be very strong in the range without any improvement in the economy at all."
On hiring plans, he said, "In pockets of the company, we hired people this year, and we expect to continue doing so in 2005."
Also on the call, GE executives said per-share earnings would have been slightly higher if not for the hurricanes, and trumpeted order strength in equipment and services. Companywide loan delinquencies fell to 1.64% from 1.79% last year.
GE's third-quarter included $300 million of after-tax hurricane losses, a figure that probably came out to about 2 cents a share of extra expense, although it was about $100 million short of the worst-case scenario some analysts predicted.
The company's biggest revenue-growth contributions came from advanced materials, where revenue rose 17% to $2.04 billion; commercial finance, where revenue rose 16% to $6.03 billion; consumer finance, where it rose 15% to $4.01 billion; and transportation, where revenue rose 20% to $3.78 billion. NBC Universal posted $4.10 billion in revenue this quarter after adding Vivendi Universal to its portfolio.
On the income line, NBC Universal profit jumped 24%, transportation profit jumped 28%, commercial finance profit rose 18%, consumer finance profit rose 14%, health care profit rose 31%, and consumer and industrial profit rose 31%.
GE's energy unit continued to be a sore spot, hamstrung by a glut of production equipment in the market. The unit's revenue slumped 5% to $4.1 billion and earnings were $639 million, down 35% from last year.