By Chelsey Dulaney
General Electric Co. said its first-quarter revenue fell amid
weakness in its oil-and-gas business and foreign exchange impacts,
as the conglomerate swung to a sizable loss on charges taken as
part of its plan to sell off the bulk of its lending arm and
refocus on its industrial operations.
Excluding exit charges, GE's operating earnings narrowly topped
expectations, while revenue came in below.
For the first quarter, industrial revenue edged down 1% to
$24.36 billion, as growth in its power and water and transportation
divisions was offset by declines in its oil and gas and health care
divisions.The segment also took a $950 million hit from foreign
exchange.
In a news release, Chief Executive Jeff Immelt described the
current environment as volatile. But the company reaffirmed that it
was on track to deliver $1.10 to $1.20 a share in industrial
per-share earnings for the year.
Shares edged down about 0.4% in premarket trading.
The company's oil and gas business posted a 8% drop in revenue
to $3.96 billion.
GE sells equipment and services to oil producers that have cut
plans for new projects and are demanding sharp discounts on
existing orders. The company warned investors late last year that
its oil and gas sales and earnings could fall 5% this year, though
analysts are now expecting a steeper drop.
Meanwhile, GE Capital revenues fell 39% to $5.98 billion.
The business has been a significant profit driver for the
company but has fallen out of favor with investors, who fear it
casts a pall on the company's industrial business.
Last week, GE said it would pare down the business
significantly, unveiling plans to sell off about $165 billion of
loans to borrowers like Wendy's franchisees, overseas consumers and
private-equity firms. GE also said it would sell a $26 billion
portfolio of investments in office buildings and other commercial
property to buyers that include Blackstone Group LP and Wells Fargo
& Co.
The plans represent one of the biggest strategic shifts in the
123-year history of the company.
Overall for the quarter ended March 31, GE reported a loss of
$13.57 billion, or $1.35 a share, compared with a profit of $3
billion, or 30 cents a share, a year earlier.
GE had warned it would book about $16 billion in charges in the
quarter to repatriate cash and for impairments because of shortened
hold periods
Excluding the charges, operating earnings came in at 31 cents a
share.
Revenue fell 12% to $29.36 billion. Excluding the GE Capital
exit impacts, revenue was down 3% to $33.1 billion.
Analysts polled by Thomson Reuters were expecting per-share
operating earnings of 30 cents, excluding the GE Capital exit
charges, and revenue of $34.23 billion, excluding GE Capital exit
charges.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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