GE Reports Mediocre Earnings, And The Stock Is Sliding Pre-market

Shares of GE are off about 1% in the pre-market after the mega-industrial-financial beat expectations on the earnings line, but came in a bit shy on the revenue line.

Here’s the look at the revenue breakdown. Note the weakness in energy infrastructure



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Here’s part of the announcement:


GE announced today third-quarter 2010 earnings from continuing operations (attributable to GE) of $3.2 billion, with EPS of $0.29 per share up 32% from the third quarter of 2009. GE’s economic environment continues to improve, as evidenced by consecutive quarters of orders and continuing-earnings growth.

Revenues were $35.9 billion for the quarter, down 5%, consistent with the first half of 2010. Revenues were impacted by lower equipment sales and reduced GE Capital assets. GE expects fourth-quarter 2010 Industrial revenues to grow sequentially from third quarter and to be about flat with the year-ago period.

“For the first time in eight quarters, we saw growth in both equipment and service orders,” GE Chairman and CEO Jeff Immelt said. “Equipment orders increased 9%, including 33% growth in Technology Infrastructure. We had strong global demand, including orders for 60 GE90 aircraft engines by Emirates, 142 Evolution Series locomotives for the North American market, and seven gas and two steam turbines to supply power to Saudi Electric Company. Healthcare orders in China and India improved by more than 20%. Service-orders growth reflects increased installed-base utilization. Overall backlog remained flat at $172 billion.

“Company execution was strong in the quarter,” Immelt said. “Industrial operating margins were 16.4%, up 40 basis points, excluding NBC Universal. We continued to invest for global product leadership, competitive adjacent-market positioning and efficient operations. We increased year-to-date research and development investment 21%. Cash generated from Industrial operating activities totaled $3.8 billion in the quarter and we are on track for $14-$15 billion this year, the high end of our plan. At quarter-end, GE had $78 billion of consolidated cash and equivalents. Strong cash generation remains a hallmark for GE.”

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