Friday, October 22, 2021
63.7 F
Fort Worth

GE misses revenue estimates, weighed down by slump in oil market

🕐 2 min read

General Electric Co. reported fourth-quarter sales below analysts’ estimates as the persistent slump in the oil market weighed on sales of industrial equipment.

“Revenue clearly was a bit light. Their cash flow was a bit light,” Nicholas Heymann, an analyst with William Blair & Co., said by telephone. “I don’t see any signs of big problems, but it was a grind quarter.”

GE is looking to regain momentum after a sluggish economy constrained growth in 2016 and pressured the company’s efforts to sharpen its focus on machinery such as gas turbines and jet engines. Chief Executive Officer Jeffrey Immelt is building a software business to complement the manufacturing operations while pursuing major deals, such as combining GE’s oil division with Baker Hughes Inc.

Revenue fell 2.4 percent to $33.1 billion, the Boston-based company said in a statement Friday. That was below the $33.9 billion predicted by analysts, according to the average of estimates compiled by Bloomberg.

While GE said it is “optimistic” about the U.S. economy, it cited a “slow-growth and volatile environment” in the fourth quarter, according to slides accompanying the release.

The shares declined 1 percent to $30.90 at 7:21 a.m. in New York before regular trading. GE gained 9.5 percent in the 12 months through Thursday, compared with a 20 percent advance for the Standard & Poor’s 500 Index.

Adjusted earnings fell to 46 cents a share, matching analysts’ estimates. Orders rose 4.3 percent in the quarter, but declined slightly on an organic basis.

Revenue climbed 20 percent in the power division, which is seeing higher shipments of a new gas turbine. GE Aviation, which is boosting production of a new jet engine, posted a 6.7 percent increase.

Sales tumbled 22 percent in the oil and gas unit, which has struggled amid the plunge and sluggish recovery of crude prices. GE hopes to capitalize on an eventual rebound through the Baker Hughes deal, which would create the world’s second-largest oilfield service provider and equipment maker. GE would own 62.5 percent of the combined company.

The manufacturer also is selling two divisions, water and industrial solutions, to help fund restructuring and free up cash for potential acquisitions. GE has said the water unit, which makes products for desalination and wastewater treatment, is generating significant interest from prospective buyers.

Operating earnings in 2017 will be $1.60 to $1.70 a share, GE said, reaffirming a forecast the company gave last month. Organic revenue is expected to increase 3 percent to 5 percent.

Related Articles

Our Digital Sponsors

Latest Articles

Texas Rangers
Fort Worth Business Press Logo
This advertisement will close in
00
Months
00
Days
00
Hours
00
Minutes
00
Seconds
seconds..
Click here to continue to Fort Worth Business Press

Not ready to subscribe?

Try a few articles on us.

Enter your email address and we will give you access to three articles a month, to give us a try. You also get an opportunity to receive our newsletter with stories of the day.

This field is for validation purposes and should be left unchanged.

Get our email updates

Stay up-to-date with the issues, companies and people that matter most to business in the Fort Worth.

  • Restaurants
  • Technology
  • and more!

FWBP Morning Brief

FWBP 5@5

Weekend Newsletter

  • Banking & Finance
  • Culture
  • Real Estate