Gen­eral Elec­tric posts US$13.6 bil­lion loss on fi­nance unit sale


The industrial heart of Gen­eral Elec­tric, the com­pany’s new fo­cus, posted lower rev­enue and earn­ings in the first quar­ter amid an enor­mous over­all loss re­sult­ing from its re­cently-an­nounced sale of most of the as­sets in its fi­nance sub­sidiary.

Net in­come from the part of GE that the com­pany will re­tain af­ter the sale fell 5 per­cent to US$3.1 bil­lion, the com­pany said Fri­day. Ad­justed earn­ings per share fell 6 per­cent to 31 cents, a penny bet- ter than an­a­lysts polled by Zacks In­vest­ment Re­search ex­pected, on av­er­age.

Rev­enue fell 12 per­cent to US$ 29.4 bil­lion, be­low the US$34.4 bil­lion an­a­lysts ex­pected.

GE CEO Jeff Im­melt said in a state­ment that the global eco­nomic en­vi­ron­ment re­mained “volatile” but that in­vest­ments in large in­fra­struc­ture projects be­ing made around the world pro­vided op­por­tu­ni­ties for growth.

Costs and charges as­so­ci­ated with the sale to­tal­ing US$14.1 bil­lion pushed the com­pany to an over­all loss of US$13.57 bil­lion in the quar­ter, down from a profit of US$3 bil­lion dur­ing last year’s first quar­ter. On a per-share ba­sis, the com­pany lost US$1.35.

The com­pany’s industrial seg­ments posted a mixed per­for­mance.

The slump in global oil and gas prices re­duced rev­enue at the com­pany’s oil and gas di­vi­sion by 8 per­cent, while profit fell 3 per­cent. Profit also de­clined in the com­pany’s power and wa­ter di­vi­sion, which makes power gen­er­a­tors and equip­ment, along with wa­ter treat­ment equip­ment.

Rev­enue fell slightly in the com­pany’s large avi­a­tion di­vi­sion, which builds air­craft en­gines, but profit surged 18 per­cent. Rev­enue at in the trans­porta­tion di­vi­sion, which makes lo­co­mo­tives, rose 7 per­cent while profit in­creased 11 per­cent.

GE shares slipped 18 cents to US$27.10 in trad­ing two hours be­fore the mar­ket opened. GE shares have risen 8 per­cent since the be­gin­ning of the year, while the Stan­dard & Poor’s 500 in­dex has risen 2 per­cent.

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