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General Electric Co. share price up, third-quarter profit tops analysts’ forecasts

General Electric Co. reported its third-quarter results surpassed analysts initial estimates as margins in its industrial unit were boosted by Chief Executive Officer Jeffrey Immelts cost reduction efforts.

The company said in its statement, which was cited by Bloomberg: “GE continues to make good progress with its simplification goals. The company is on track to meet its goal of $1 billion or more in structural cost-out for the year, with $674 million of cost-out through the third quarter.” Mr. Immelt also added: “The environment is volatile, but infrastructure growth opportunities exist, and GE is executing well.”

According to General Electrics statement, quarterly revenue rose by 1% to $36.2 billion, slightly behind analysts projections of $36.9 billion. Operating earnings per share, excluding pensions costs, rose 6% from a year earlier to 38 cents per share. This result beat analysts estimates of 37 cents a share. Operating margin in the industrial unit rose by 0.9%.

The companys orders over the third fiscal quarter increased by 22% to $31.4 billion, with a 31% increase in equipment orders for locomotives, gas turbines and aircraft engines thanks to new technologies.

Mr. Immelt has recently been focused on boosting the proportion of the companys earnings generated from its core industrial operations, while trimming its financial operations by disposing of GE Capital assets.

General Electric expressed optimism about the remainder of the year and predicted a strong fourth quarter which should be boosted by a 40% jump in shipments of gas turbines.

One of the analysts at Sanford C. Bernstein & Co. – Mr. Steven Winoker commented in a research report last week, which was cited by Bloomberg: “At GE, we see a portfolio that is finally changing, we believe for the better.” He also added that General Electric “has been making significant strides in its cost-reduction targets”.

General Electric Co. settled 2.35% higher on Friday to close at $24.82 per share, marking a one-year change of +0.57%. This was the biggest gain in a year and valued the company at $249.04 billion. According to CNN Money, the 13 analysts offering 12-month price forecasts for General Electric Co have a median target of $29.00, with a high estimate of $32.00 and a low estimate of $27.00. The median estimate represents a +16.84% increase from the last price of $24.82.

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