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GE reports flat earnings on lower sales

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(Globalpost/GlobalPost)

General Electric Friday reported essentially flat second-quarter earnings on lower revenues, but reaffirmed its 2013 targets to increase profit margins.

Net income at the US industrial behemoth came in at $3.13 billion, about 1 percent above the year-ago figure of $3.10 billion.

GE's revenue came in shy of expectations at $35.1 billion, compared with $35.6 billion. Net revenues a year ago were $36.4 billion.

GE recorded profit growth in six of seven industrial segments.

But results in the power and water segment, currently the company's largest industrial group by revenue, fell by 17 percent. Profits in this group dropped to $1.1 billion from $1.3 billion. Analysts have said this unit was hit by declining wind and gas turbine orders.

On the flip side, profits in aviation and oil and gas grew by 16 percent and 14 percent respectively.

Analysts were also eyeing the earnings for an update on GE's target of improving industrial segment profit margins by 70 basis points in 2013. The company said it was "on track" to meet this target, adding that it gained 50 basis points of industrial profit margin growth in the quarter.

GE also reaffirmed plans to reduce the size of its GE Capital financing arm, to sharpen its identity as an industrial company. Profits in this segment shrank 9 percent to $1.9 billion.

GE chief executive Jeff Immelt said the business environment in the second quarter was "slightly improved" compared with the first quarter, though the climate in Europe "is stabilizing but still challenged."

"We continue to execute on operational priorities within our control: achieving our cost-out goals, maintaining a very strong cash position, reducing the size of GE Capital, and returning substantial cash to shareholders," Immelt said.

"Our overall framework for the year is unchanged."

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http://www.globalpost.com/dispatch/news/afp/130719/ge-reports-flat-earnings-lower-sales