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General Electric (GE) Q1 Tops View, On Track For Double-Digit Earnings Growth In 2012

 April 20, 2012 06:58 AM

(By Balachander S) Industrial conglomerate General Electric Co. (NYSE:GE) reported better-than-expected quarterly earnings, and said the company on course for double-digit profit growth at its Industrial and GE Capital segments this year. The stock edged higher in premarket trading on Friday.

Operating earnings per share (EPS) increased 3 percent to 34 cents from 33 cents in the same period last year, topping market expectations by a penny.

Revenue dropped 8 percent to $35.18 billion, following the completion of the sale of NBC Universal to Comcast, yet beat consensus estimate of $34.70 billion. Revenue from GE's financial services arm fell 12 percent, while Industrial segment revenue climbed 14 percent, led by transportation and energy.

[Related -General Electric Company (GE) Q4 Earnings Preview: Feeling The January Effect]

GE Capital's earnings were flat with last year, but jumped 27 percent excluding Garanti sale impact in the year-ago period. Industrial segment earnings increased 10 percent.

"Today's results demonstrate that we are achieving Industrial growth and GE Capital continues to grow stronger," said GE CEO Jeff Immelt. "This quarter we witnessed broad-based strength in orders across all our Infrastructure businesses and in both equipment and services."

GE expects to return excess cash from GE Capital over the course of 2012, subject to review by the Federal Reserve.

GAAP EPS from continuing operations were 31 cents, flat with the prior year quarter. Earnings from continuing operations declined 4 percent to $3.25 billion.

[Related -General Electric Company (GE): GE Shares At An Inflection Point]

Earlier this month, GE rating was downgraded by rating agency Moody's citing GE Capital's higher risk. While the company's infrastructure, transportation, and energy business are predicted to do well, weakness is seen in financial operations. Moody's had said despite the steps GE took after the credit crisis, there are still risks attached to the company's funding model.

In the fourth quarter, GE's operating EPS were 39 cents, on revenue of $37.97 billion. It was GE's Capital Services that recorded 9 percent downside in revenues, whereas industrial units generated 10 percent more revenues.

The stock, which has been trading between $14.02 and $21.00 over the past year, ended Thursday's regular trading at $19.14.

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