(By Salman - iStockAnalyst Writer)General Electric Co. (NYSE:
GE), the largest US conglomerate, is scheduled to report third-quarter results before the market open on Friday, October 16, 2009. Analysts, on average, currently expect the company to report earnings of 20 cents a share on revenue of $40.03 billion. In the year ago quarter, the company reported earnings of 45 cents per share on revenue of $47.2 billion.
General Electric Company operates as a technology, media, and financial services company worldwide, with products & services ranging from aircraft engines, power generation, water processing & security technology to medical imaging, business & consumer financing, media content & industrial products.
The Fairfield, Connecticut based-company in July reported that its second-quarter net income tumbled 49% to $2.6 billion, or 24 cents per share, from $5.1 billion, or 51 cents per share, in the year-ago quarter. Revenue plunged 17 percent to $39.1 billion. Analysts, on average, expected GE to earn 23 cents per share on revenue of $42.16 billion.
The financial crisis, which worsened late last year, has had a sizable impact on GE. The company's financial arm, which usually generates bulk of its profits, was especially hit hard by the economic downturn. GE Capital's profit totaled $590 million in second quarter, down 80% from last year. In the second quarter, energy was the only business that grew, as earnings for GE's energy infrastructure unit were up 13% on flat revenue. GE's real estate unit, which owns office buildings and makes loans for commercial properties, posted a $237 million loss compared with $484 million in profits a year earlier. Aviation revenue was off 6%, and healthcare dropped 12%.The conglomerate's NBC Universal entertainment division saw profits fall 41 percent on weak television advertising. GE's industrial division, which makes products like home appliances, train locomotives, diagnostic equipment for hospitals and jet engines, too has struggled during the recession. The company now expects its industrial units to just break even this year. Previously, the company had said earnings could reach $5 billion. In the second-quarter, industrial sales dropped 7 percent to $26 billion. Similarly as of July, orders were down about 16% year-to-date and down about 23% in FX adjusted versus last year.
However, CEO Jeff Immelt believes that the company should get a boost in the second half of the year from global stimulus spending, which he predicts could bring in around $190 billion of new business. He is also confident that GE Capital "remains on track to be profitable for the full year.
According to media reports, GE is preparing to sell or reduce its stake in NBC Universal in a deal with Comcast Corp. (NASDAQ:
CMCSA), the largest US cable operator, and may divest the media unit entirely in seven years. "Discussions are ongoing whether it is IPO or other partnership," Immelt said when asked whether GE was talking to Comcast to sell a stake in NBC. GE owns 80% of NBC, with Universal SA, the French conglomerate, holding the balance.
In August, it was reported that GE has hired JPMorgan Chase & Co. (NYSE:
JPM) to find a buyer for most of GE Security, which builds surveillance cameras and alarms. The sale may fetch around $2 billion, according to people familiar with matter.
In terms of stock performance, GE shares are down roughly 3% since the beginning of the year. Shares of the diversified company fell 27 cents or 1.60% to $16.57 in afternoon trade on Thursday.
Disclosure: Author doesn't own any of the stocks discussed here.
