GE shares up despite $1.2B loss in Q1

new york — Slumping industrial conglomerate General Electric won a reprieve on Wall Street on Friday after reporting strong results in some divisions even as it suffered a quarterly loss due to a hefty legal charge.

GE, which has been hurt by weakness in its power and oil and gas businesses, reported a first-quarter loss of $1.2 billion, due to $1.5 billion in reserves to cover legal settlements connected to a subprime lending unit it exited.

However, investors took heart after GE reaffirmed its full-year financial targets and avoided fresh negative surprise announcements that have plagued recent results.

Revenues increased 6.7 per cent to $28.7 billion.

“The first quarter is a step forward in executing on our 2018 plan and we are seeing signs of progress,” said chief executive John Flannery.

GE has been signalling for months that its encumbered power division would be an earnings vulnerability for some time to come, but Flannery said on Friday that the outlook was even worse than previously thought.

The company now expects the overall market for new gas turbine orders to be less than 30 gigawatts, compared with the prior estimate of 30 to 34. Factors driving the weakness include the rising share of renewable energy, energy efficiency efforts and some delays in orders, Flannery said. — AFP