NEW YORK – General Electric beats expectations for revenues from Wall Street in the first quarter. This unexpected outcome was helped by the strong demand for the company’s power equipment and locomotives.
The largest U.S. conglomerate said factory orders increased by 20% in the period and sale prices have improved in almost every part of their business.
The results should help its chief executive, Jeff Immelt, to achieve his goal of boosting profit margins by 0.5 percentage points this year.
“We are seeing a broad-based strengthening in orders for all our business structures, both for our equipment and for our services,” Immelt said in a statement.
GE shares rose by 2.4% to $19.6 in the open market.
Investors noted that the company has achieved solid organic growth, a move that does not consider the impact of acquisitions or currency fluctuations.
“The organic revenue growth in the industrial business was great, from 11 percent,” said Jack De Gan, chief investment officer at Harbor Advisory Corp and owner of GE shares.
“GE has been a disappointment for a long time but is now finally coming back to a point where earnings can grow at a rate better than the previous S & P,” he added.
Investors said the report was a good sign for the rest of the industry. Leading companies such as United Technologies Corp rivals, 3M Co., and Caterpillar Inc. are scheduled to publish its results next week.
Increased Industrial Revenue
GE said they won in the first quarter with $3.030 million or $29 cents a share, from $3.430 billion or $31 cents per share, a year earlier.
GE’s adjusted profit was $0.34 per share and sales totaled to $35.200 billion.
Analysts expected a profit of $0.33 per share on sales of $34.700 billion, according to Thomson Reuters I / B / E / S.
Revenues for the world’s leading manufacturer of aircraft engines and power turbines fell by 8.2 percent to $35,200 million but topped the $34.700 billion that Wall Street expected.
The decline in revenue reflects the sustained reduction of GE Capital’s business and the sale of majority stake in NBC Universal to Comcast Corp.
Revenues of GE’s industrial businesses rose by 14%.
The strongest increase in revenue came from the power units and locomotives of the conglomerate.
GE has made improving their dividend and repurchase shares top priorities for the year, aiming to return to shareholders 12,000 million in common stock sold in October 2008 during the global financial crisis.
GE reiterated its forecast of an increase of double digits in profits for its industrial and GE Capital for the year.