General Electric Co. on Friday posted weak earnings for the third quarter even though revenues increased.
Adjusted earnings ended sharply lower than estimates on Wall Street, while top lines beat the Street.
GE CEO and Chairman John Flannery said the quarter was very challenging, while most of the businesses had a solid performance for earnings that was offset by a drop in Power performance due to a difficult market.
During pre-market trading, GE shares traded down 5%.
GE’s CEO added that its Industrial CFOA for the recently ended quarter was down because of lower volume in its Power sector, resulting in less earnings and a higher inventory.
GE expects that the new team of leaders at Power and actions taken over costs will put it into a better position for 2018 and beyond.
Continuing operations earnings reached $1.91 billion, which were down 9% from last year during the same quarter of $2.1 billion. Per share earnings from its continuing operations were down 4% ending at 22 cents while last year they were 23 cents.
These latest results also include an impact of 16 cents per share from 13 cents impairments and higher costs for restructuring along with lower gains of 3 cents.
Its adjusted industrial earnings per share reached 26 cents in comparison to last year’s 27 cents. It adjusted industrial and verticals earnings ended the quarter at $2.6 billion equal to 29 cents per share, in comparison to last year’s 32 cents per share.
Analysts were expecting earnings to reach 49 cents per shares. Estimates by analysts typically do not exclude special items.
During the third quarter, earnings prior to taxes dropped by 29% compared to the same period of last year to just over $1.47 billion.
Its industrial margin was down by 240 basis points to 7.6%, while the adjusted industrial margin fell to 11.8% or by 220 basis points.
Total revenue along with other income was up 14% ending the quarter at $33.47 billion compared to last year’s $29.26 billion. Analysts were expecting $32.55 billion in revenues.
Goods and services’ sales were down 10% from the same period one year ago ending the quarter at $29.44 billion. Revenues in its industrial segment were up 10% to $26.8 billion, but declined organically by 1%.
During the quarter, revenues from power were down 4% ending at $8.68 billion, while revenues from gas & oil were up 81%.