Industrial segment boosts GE’s Q3 results

The results come as GE winds down the finance business that once made up around half its earnings in order to focus on its core industrial businesses like aviation, power and health care. Lower demand for GE’s wares from customers in the oil and gas business were to blame.

General Electric Company (NYSE:GE) stock was trading in the green at $28.03, up 1.56% at yesterday’s closing bell. The Dow Jones Industrial Average and S&P 500 logged the best close since August’s plunge. At the same time, General Electric remains committed to achieve 2%-5% industrial segment organic revenue growth; margin expansion; a smaller GE Capital; $16 billion in cash flow from industrial activities; and $30 billion cash return to shareowners. Finishing the split-off will help position GE Capital to apply in the first quarter to drop its federal designation as a systemically important financial institution. GE Capital is likely to pay $3 billion in dividend to its parent in 2015 and remains on track to pay $18 billion in dividend in 2016. That could produce a buyback of as many as 750 million shares, the company said.

GE, which backed its full-year profit outlook, said it expects to retire as much as 7 percent of its outstanding floated shares by mid-November, as it completes the spinoff of its former retail finance business, Synchrony Financial (SYF). On average, equities research analysts predict that General Electric Company will post $1.30 EPS for the current year.

Wall Street analysts surveyed by Thomson Reuters had forecast almost $28.65 billion in revenue and 26 cents in earnings per share. Revenue rose 5% to $6 billion in the aviation unit.

“If our stock is undervalued, there is a good possibility we would invest that way”, he said. “We like the industry, we’re committed to the industry”. GE said the steepness of the declines were caused by a particularly strong quarter a year ago. “We’re not planning for any great breakout, so won’t see us making outlandish investments that don’t have any chance of paying off”, he said. Vetr upgraded shares of General Electric Company from a “hold” rating to a “buy” rating and set a $28.47 target price for the company in a research report on Thursday, June 25th. While supporting the GE Capital divestitures, Trian said it wants to see Immelt follow through on the plan and other efforts to boost margins.

The company also announced that it will start its share exchange next week as it lets go of a majority stake in Synchrony Financial. “This week we announced the sale of $30bn of commercial lending businesses, bringing our total signed deals to date to $126bn”.

Orders plummeted 26 percent and revenue was short of a few analysts’ estimates.