GE Gets Turbine Unit for Lower Price

Stewart & Stevenson Services Inc. agreed to pay $84 million to General Electric Co., lowering the price GE will have paid to buy a gas turbine business by 14% to $516 million. Houston-based Stewart & Stevenson said it will take a charge of $20 million, or 71 cents a share, for its fiscal quarter ending Oct. 31 for the price adjustment. GE’s power systems unit, the world’s leading supplier of power-generation equipment and services, paid $600 million in February for Stewart & Stevenson’s business that converts aircraft engine turbines into sources of power for smaller generation plants. Part of the adjustment is due to weaker demand from Asia, which caused the unit’s backlog of work to decline between the time the sale was negotiated and the closing, Stewart & Stevenson said. After the price adjustment, the sale results in a gain of about $41.3 million, or $1.25 a share, for Stewart & Stevenson. Before the charge, Stewart & Stevenson had been expected to earn 33 cents a share for its third quarter. GE’s power systems unit had $7.5 billion in sales last year. Stewart & Stevenson stock rose 44 cents to close at $11.31 on Nasdaq. Shares of Fairfield, Conn.-based GE fell 44 cents to $83.38 on the NYSE.