Diversified conglomerate General Electric Co on Friday reported third-quarter profit in line with Wall Street expectations, but its shares declined amid concerns about weak margins, particularly at its plastics and NBC Universal units.
GE, with operations from jet engines to commercial lending, said profit was up 6.1 percent on 12.3 percent revenue growth. "You didn't get that revenue creating any leverage with the bottom line for some reason, so maybe that's a question mark," said Thomas Leritz, portfolio manager, Argent Capital Management, of Clayton, Missouri, who follows GE but does not own the shares. "If your revenues are better, why aren't you seeing it fall to the bottom line?"
GE Chairman and Chief Executive Jeff Immelt told investors on a conference call that he believes the US economy is holding up, though higher interest rates are likely to take some toll on consumer spending.
"The economy is solid. It's really being fuelled by tremendous global infrastructure spending," Immelt said. "As interest rates go up, you're going to see some slowing, but on balance the US consumer is still healthy and still spending money."
The world's second largest company by market capitalisation reported net income of $4.96 billion, or 48 cents per share, compared with $4.68 billion, or 44 cents per share, a year earlier.
Earnings from continuing operations were 49 cents per share, matching the average Wall Street forecast as compiled by Reuters Estimates. Revenue rose 12.3 percent to $40.86 billion. Analysts expected $39.89 billion, on average. Segment profit at the infrastructure unit, which makes products from windmills to locomotives, was up 24 percent to $2.34 billion, with revenue up 20 percent to $12.1 billion.
Comments
Comments are closed.