GE Matches Forecasts With 13% Profit Gain
General Electric Co., defying the trend of large U.S. companies reporting or warning of weaker earnings, said Thursday that its third-quarter profit rose 13%, in line with expectations.
Net income at GE, owner of the world’s largest non-bank finance company and the top-rated NBC television network, rose to $2.28 billion, or 69 cents a share, from $2.01 billion, or 60 cents, a year earlier. Sales were $24.14 billion, a 9.8% jump but less than the 15% to 20% GE had predicted a month ago.
GE Chairman John Welch said steady sales growth, the rapid introduction of products and a higher operating margin--15.5% of sales, compared with 14.5% last year--helped boost earnings.
While several multinational companies have warned that profits will slump because of the Asian economic crisis, GE gets only a small part of its revenue and profit from that region.
But GE said shipments of some turbines to Indonesia were pushed into the fourth quarter, raising concern that the company isn’t immune to the global turmoil, analysts said.
GE’s shares fell $3.44 to close at $71.56 on the New York Stock Exchange.
Earnings at GE Capital, GE’s credit arm, rose 15%. With its 28 businesses, the unit typically accounts for about 40% of GE’s profit.
GE doesn’t detail revenue and profit at its other units on a quarterly basis.
Analysts said GE’s aircraft engine subsidiary grew the most in the latest quarter, powered by new engine sales and booming parts supply and maintenance businesses. GE’s medical systems division ranked second.
Analysts also estimated that sales at NBC rose as much as 5% while profit soared as much as 20% on higher ad sales and gains at CNBC and MSNBC.
At a Glance
Other earnings, excluding one-time gains and charges unless noted:
* Abbott Laboratories Inc., one of the world’s biggest makers of drugs, medical devices and health test products, said third-quarter profit rose 13% to $531.7 million, or 34 cents a diluted share, in line with estimates. Sales rose 6% to $3 billion, with strength in its hospital equipment business and the ulcer remedy Prevacid.
* Dow Jones & Co., publisher of the Wall Street Journal and Barron’s, said its third-quarter profit before charges rose 0.8% to $35.4 million, or 37 cents a share, from $35.1 million, or 36 cents, on a pro-forma basis, which accounts for the sale of its Telerate financial data service. Analysts had expected earnings of 36 cents. Revenue fell 1.7% to $443.6 million on a pro-forma basis. Improved margins at the company’s Ottaway newspaper chain offset a 6.8% drop in advertising revenue at the Journal.
