- Third-quarter operating earnings of $3.7 billion, or 36 cents a share.
- Earnings down 3% year-over-year, but EPS flat because of share buybacks.
- Earnings beat consensus estimate of 35 cents.
- Revenue of $35.7 billion misses consensus estimate of $36.0 billion.
- Industrial revenue up 2% year-over-year, Oil & Gas up 18%, Power & Water down 10%.
- GE Capital pays $2.0 billion dividend to parent company.
Industrial SegmentsTotal industrial revenues were down 3% from a year earlier, to $25.813 billion in the third quarter, with Oil & Gas showing the largest increase of 18%, while Power & Water showed the largest decline of 10%. "As expected, our Power & Water business is strengthening in the second half of the year," Immelt said. "Our strategic initiatives are working: growth market orders expanded 22%; service revenues grew 7%; and margins grew significantly, driven by a positive value gap and company-wide simplification efforts. We have reduced Industrial structural costs by approximately $1 billion year-to-date, and will exceed our plan for the year." For Power & Water segment, third-quarter revenue totaled $6.498 billion, increasing from $5.715 billion during the second quarter, but declining from $7.196 billion during the third quarter of 2012. Third-quarter profit for the Power & Water segment was $1.289 billion, increasing from $1.087 billion the previous quarter and $1.184 billion a year earlier. Third-quarter Oil & Gas revenue totaled $4.315 billion, up from $3.955 billion the previous quarter and $3.645 billion a year earlier. Oil & Gas segment profit for the third quarter was $519 million, down from $532 million in the second quarter, but up from $469 million in the third quarter of 2012. Energy Management revenue during the third quarter totaled $1.828 billion, declining from $1.981 billion in the second quarter and from $1.879 billion in the third quarter of 2012. Segment profit was $18 million in the third quarter, down from $31 million the previous quarter and $42 million a year earlier Aviation segment revenue for the third quarter was $5.364 billion, growing from $5.303 billion in the second quarter and $4.781 billion in the third quarter of 2012. Profit for the Aviation segment rose to $1.091 billion in the third quarter from $1.067 billion the previous quarter and $924 million a year earlier. Third-quarter Healthcare revenue $4.304 billion, declining from $4.490 billion the previous quarter and down slightly from $4.307 billion a year earlier. Segment profit was $665 million, down from $726 million in the second quarter, but up from $620 million in the third quarter of 2012. GE Capital GE Capital's third-quarter revenue totaled $10.670 billion, declining from $10.980 billion the previous quarter and $11.274 billion a year earlier. Third-quarter profit for the finance unit was $1.895 billion, down slightly from $1.922 billion in the second quarter, but up from $1.675 billion in the third quarter of 2012. GE Capital paid a $2.0 billion dividend to the parent company during the third quarter. The finance unit had $515 billion in total assets as of Sept. 30, declining from $521 billion the previous quarter. The unit's "ending net investment" (ENI), excluding non-interest bearing liabilities, cash and equivalents, was $385 billion. Immelt has said his goal for GE Capital's ENI is a further reduction to between $300 billion and $350 billion by the end of 2013. Following the dividend payments to the parent company, GE Capital's Tier 1 common equity ratio was 11.3%.
Parent and StockGE in February increased its common share buyback authorization to $35 billion from $25 billion. Immelt has previously said the company's 2013 share repurchases would total about $10 billion. The company said it had "returned $13.9 billion to investors year-to-date through dividends and share buybacks." General Electric's shares closed at $24.68 Thursday, returning 20% this year, following a 21% return during 2012. Based on a quarterly payout of 19 cents, the shares have a dividend yield of 3.08%. The shares trade for 13.7 times the consensus 2014 EPS estimate of $1.80. The consensus 2015 EPS estimate is $1.94. GE's shares were up over nearly 4% in afternoon trading, to $25.60. "GE's earnings quality in the quarter was high," wrote Deutsche Bank analyst John Inch in a note on Friday. "Equipment and Services orders for the quarter were up 19% - a substantial improvement from last quarter's up 4%, with Europe rebounding to up 17% and the U.S. continuing to remain extremely robust at up 18%," Inch wrote. A major contribution to growing Power & Water orders was the signing in September of three contracts with Algeria's national gas and electric company, for $2.7 billion, which includes providing turbines for six power plants. "Overall, we believe that investors have been in a 'show me' posture towardGE given the stock's weak performance since the 2Q13 earnings beat - withparticular scrutiny applied toward the company's target of 70bps of marginexpansion. Consequently, we expect GE's shares to outperform," Inch wrote. His price target for GE' stock is $28.00. GE data by YCharts
Interested in more on General Electric? See TheStreet Ratings' report card for this stock. -- Written by Philip van Doorn in Jupiter, Fla. >Contact by Email. Follow @PhilipvanDoorn