Created: 10/18/2013 8:05 AM WHEC.com
(AP) NEW YORK - General Electric said Friday that net income fell 9 percent in the third quarter as the company struggles to grow revenue and profits after shedding media and banking assets. But improving industrial performance helped the company beat Wall Street expectations.
GE earned $3.19 billion on revenue of $35.7 billion in the third quarter. During last year’s third quarter the company earned $3.49 billion on revenue of $36.3 billion. GE’s earnings per share dropped to 31 cents, from 33 cents last year.
Adjusted to remove the effects of restructuring and other charges, the company said it earned 40 cents per share. Analysts had expected GE to earn 35 cents per share, on average, according to FactSet.
GE shares rose 3 percent to $25.38, in pre-market trading after results were released. That’s the highest level since September of 2008, when shares were plummeting on concerns that GE would not be able to survive intact during the financial crisis because of its enormous banking division.
Since then, GE has reduced the size of its banking operations, as well as other non-industrial businesses such as NBC Universal. Instead, the company has become more of an industrial conglomerate that builds and services complex equipment, products and services to utilities, hospitals, oil and gas drillers and aircraft manufacturers.
The company hasn’t yet been able to fully replace the revenue and profit lost by its non-industrial divisions, but its industrial operations are steadily improving.
GE has said in recent quarters that performance at its industrial operations would show strong growth in the later part of this year, and the company reported that industrial segment profit rose 11 percent to $3.97 billion in the third quarter. Aviation, oil and gas, transportation and home and business solutions divisions all grew profit by more than 10 percent.
"They are going to have to deliver on better expectations for the last quarter, but they are making good progress toward that," said Christian Mayes, an analyst at Edward Jones.
The company’s power and water division, which had been hurt earlier in the year by lower sales of wind turbines, saw profit rise 9 percent. Health care grew 7 percent, and the company’s energy management division posted a 57 percent decline in profit.
The company said orders rose 19 percent in the quarter to $25.7 billion.