GE suffers net loss of $98 mn in 1Q
23 Apr 2016
General Electric Co (GE) reported a net loss of $98 million for the quarter ended March 31, 2016, compared with a net loss of $13.57 billion a year earlier, mainly due to non-cash charges from the sale of financial businesses, and sluggish demand for oil and gas drilling equipment. Revenue declined 5percent to $27.85 billion.
The year-earlier loss, however, was largely driven by a $6.3-billion income-tax provision and a $8.94 billion loss from discontinued operations.
The company, however, said it still expected a full-year profit of $1.45 to $1.55 a share.
GE cut its full-year outlook for oil and gas equipment sales, saying it now expects a 30-per cent drop. It had previously forecast a 10-15-per cent decline.
Power generation equipment shipments were also low in the first quarter, but it expects a pickup in the second half of the year.
''We're in the midst of a challenging oil and gas market. However, we're seeing sustained strength in aviation and power markets, and health care is rebounding,'' chief executive officer Jeff Immelt said, adding that the second-half organic revenue should be up 5 percent.
"I feel good about how we're executing on the power business," Immelt said, noting anticipated sales of gas turbines and other power generation equipment would be largely responsible for GE hitting its companywide revenue outlook.
Revenue from the oil and gas segment dropped 18 per cent to $3.31 billion, and its transportation business plunged 25 per cent to $981 million. But power revenue climbed 13 per cent to $5.2 billion, aviation jumped 10 per cent to $6.26 billion, and health care rose 3 per cent to $4.18 billion.
Among its faster-growing segments, renewable-energy revenue surged 62 per cent to $1.67 billion, energy connections spiked 34 per cent to $2.26 billion, and digital leapt 29 per cent to $1.2 billion.
In January, GE agreed to sell its home appliances business to China's Haier Group for $5.4 billion. (GE gets regulatory approval to sell appliance business to China's Haier Group)
It has also agreed to sell $166 billion GE Capital as part of its plan to divest around $200 billion worth of non-core assets in order to transform itself into a pure-play industrial-manufacturing company.
GE's rival Honeywell booked a profit of $1.19 billion in the March quarter. Revenue increased 3.4 per cent to $9.5 billion, but rose 1 per cent excluding acquisitions and currency effects.
