General Electric Co., the worlds biggest supplier of heavy-duty gas turbines and jet engines, said that fourth-quarter earnings beat analysts forecasts amid strong performance at its power and aviation operations, while the oil and gas unit managed to blunt a hit by tumbling oil prices.
General Electric revealed in a statement that operating profit per share, excluding pension expenses, increased by 6% to 56 cents in the quarter compared to a year earlier, topping analysts forecasts for 55 cents per share.
In addition, the US-based company said group revenue increased by 4% to $42 billion, slightly below analysts expectations for $42.2 billion. Nevertheless, the profit increase reflected a continued expansion in margins at the companys industrial operations, up 0.5% at 18.8%.
Revenue at GEs power division soared 22%, while sales in the aviation unit rose by 4.1%.
However, tumbling oil prices had a negative impact on the oil and gas units performance where sales slid 5.6%, although operating profit rose 1.5%. Orders slid 10%, including a 72% drop in orders for drilling equipment such as blowout preventers.
The Chief Executive Officer of the company – Mr. Jeff Immelt – said in a statement: “The environment remains volatile, but we continue to see infrastructure growth opportunities.”
General Electrics oil and gas business accounted for 17% of the companys industrial revenue in 2014 but tumbling oil prices have forced the management team to issue a warning for a drop in both revenue and profit this year.
Mr. Immelt has put his efforts into shrinking GEs finance operations, while expanding its manufacturing business. He said that the company is on track to reach its goal of deriving 75% of its profit from manufacturing and industrial services next year, and only 25% from its financial arm, as opposed to respectively 58% and 42% last year.
GE recently took a breather as the shareholders of France-based Alstom SA approved the acquisition of the latters energy assets in December 2014, with the purchase expected to be finalized later this year.
General Electric Co. closed 0.82% higher at $24.48 per share in New York on Friday, trimming its one-year decline to -5.19%. The company is valued at $245.83 billion. According to CNN Money, the 15 analysts offering 12-month price forecasts for General Electric have a median target of $29.00, with a high estimate of $32.00 and a low estimate of $26.00. The median estimate represents a +18.46% increase from the last price of $24.48.
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