GE and GE Capital report $3 billion in combined losses

Combined losses for both total $3 billion

General Electric reported a $1.2 billion loss in the first quarter of 2018, outperforming analyst earnings projections despite lowerthan-expected revenue of under $28.7 billion as CEO John Flannery continues to assess business units for possible sale.

Shares of Boston-based GE were up 5 percent to $14.65 on Friday afternoon, after having spent much of the first quarter in free fall, dropping 23 percent between January and March.

GE Capital lost nearly $1.8 billion in the quarter, much of that amount in businesses GE lists as discontinued from a former mortgage business under investigation by the U.S. government and other financing ventures. During the quarter, GE set aside $1.5 billion as a reserve against any future payments as a result of the federal probe, and indicated it had cut an additional $200 million in costs at GE Capital without stating immediately whether that had any impact on jobs.

GE Capital has its main office in Norwalk, with reports this month suggesting the parent company is considering a full divestment of the unit that represents GE’s last toehold in southwestern Connecticut, where it formerly had its headquarters in Fairfield prior to moving it to Boston in 2016. In a Friday conference call, Flannery described as “incremental” in nature any asset sales at GE Capital, reiterating a target of $15 billion in asset sales through 2019.

At last report, GE and GE Capital had 1,400 employees in Norwalk’s Towers complex along the Merritt Parkway, who oversaw investments of $146 billion in assets. At the close of 2017, GE Capital reported a total workforce of 4,000 people, down by 2,000 from a year earlier and from 47,000 people at the close of 2014.

GE Capital provides

At the close of 2017, GE Capital reported a total workforce of 4,000 people, down by 2,000 from a year earlier and from 47,000 people at the close of 2014.

financing on products and services related to GE’s major industrial divisions like GE Aviation and GE Power, with revenue down 19 percent in the first quarter to below $2.2 billion and GE divesting assets valued at roughly $500 million during the first quarter.

“Asset sales ... are well under way,” said Jamie Miller, chief financial officer of GE, referencing GE Capital on a Friday conference call. “We’ve got engagement with multiple parties right now.”

Former GE CEO Jeff Immelt had already carved off several major financing arms in 2015 and 2016, including commercial finance operations purchased by Wells Fargo and relocated to Danbury; and the spinoff of Synchrony Financial based in Stamford, which reported on Friday a $640 million profit in the first quarter from its retail credit card programs, up from $385 million a year ago.

The GE Capital loss for the quarter included $45 million that GE attributed to the impact of the Tax Cuts and Jobs Act on renewable energy investments, and $50 million in costs the results of calling $2 billion of excess debt.

GE Aviation led all divisions with a 26 percent increase in first-quarter profits to $1.6 billion, with revenue up 7 percent from a year ago to $71 billion. GE did not state immediately any possible financial impact related to inspections commenced by Southwest Airlines and other carriers, after a Southwest flight’s engine disintegrated this week that had been manufactured by a joint venture of GE and Safran, with investigators focusing on possible metal fatigue in fan blades.

Michael Nagle / Bloomberg A monitor displays General Electric Co. signage on the floor of the New York Stock Exchange.