Home Business News General Electric shares jump 5% as earnings top estimates, backs 2018 outlook

General Electric shares jump 5% as earnings top estimates, backs 2018 outlook

4 min read
0
32

General Electric reported first-quarter earnings Friday that outpaced Wall Street expectations and reaffirmed its financial outlook for the year.

div > div.group > p:first-child”>

Earnings in the latest period were fueled by strong performance by the company’s aviation, healthcare, renewables, transportation and corporate units, partly offset by power, oil and gas and GE Capital units.

GE said the power market continues to be challenging, with orders down 29 percent. However, it called out that it is making progress on costs and service execution.

Shares of GE rose 5 percent in premarket trading following the report.

In the first quarter, the company posted a net loss of 14 cents a share, which was wider than the loss of a penny a share a year ago. However, on a continuing basis, GE net income was 4 cents a share in the latest period, up from 1 cent a share year ago.

On an adjusted basis, however, GE earned 16 cents a share, which was higher than the 11 cents a share that analysts were expecting, according to Thomson Reuters.

First-quarter total revenue rose 7 percent to $28.66 billion from $26.88 billion a year ago.

“The first quarter is a step forward in executing on our 2018 plan and we are seeing signs of progress in our performance,” said GE Chairman and CEO John Flannery, in the company’s earnings release. “Industrial earnings, free cash flow, and margins all improved year over year. We reduced Industrial structural costs by $805 million and are on track to exceed our cost reduction goal of $2 billion in 2018.”

The first-quarter report offers further relief for GE, after last week’s earnings restatement also held no nasty revelations. The restatement came largely in-line with what the company announced during its fourth-quarter call with investors, with no repercussions for the company’s expected 2018 earnings.

In the latest quarter, GE recorded reserves of $1.5 billion for potential liabilities from the U.S. Justice Department investigation in connection with alleged subprime mortgage violations for GE Capital’s now defunct WMC mortgage business. Deutsche Bank had estimated GE had $426 million set aside, while Bank of America said its model assumes about “$1 billion of cash outflow to settle” the WMC claims.

The embattled industrial conglomerate saw its shares drop to the lowest level since July 2009 as Wall Street and the media alike questioned the risks lurking within GE Capital’s portfolio. The stock has slid 21 percent since January, when GE first announced a review of its GE Capital insurance portfolio. There were no updates in Friday’s report regarding the SEC investigation into GE’s accounting practices regarding the GE Capital review.

Let’s block ads! (Why?)


Source link

Leave a Reply

Your email address will not be published. Required fields are marked *

Check Also

American Airlines passenger sparks mid-flight brawl after denied beer, threatening to kill seatmate

One unruly American Airlines passenger caused quite the scene in the high skies when his r…