April 20, 2012 / 11:19 AM / 6 years ago

Instant View: General Electric posts quarterly profit

(Reuters) - General Electric Co’s first quarter earnings slightly beat Wall Street expectations, helped by strong sales of jet engines and energy equipment, as well as profit growth at its finance arm GE Capital.

Profit excluding special items was 34 cents a share at the largest U.S. conglomerate, a penny above the average analyst forecast, according to Thomson Reuters I/B/E/S. Revenue fell 8.2 percent to $35.18 billion, due in part to the sale of NBC Universal, but beat Wall Street’s expectation of $34.7 billion.

GE shares rose 1 percent to $19.25 in premarket trading..

COMMENTARY

PERRY ADAMS, SENIOR VICE PRESIDENT OF HUNTINGTON WEALTH ADVISORS IN TRAVERSE CITY, MICHIGAN, WHICH HOLDS GE SHARES

“It’s a really strong quarter. I think what was most impressive was organic growth. Segment profits were up 14 percent and 11 percent of that was from organic growth, just a really solid quarter.”

“Margins may have been somewhat disappointing but they are still targeting 50 basis points of improvement for the year.”

“The other thing that was a solid positive was pricing. Pricing on new orders was up 50 basis points, and they had higher prices in four of their five businesses.”

TODD SCHOENBERGER, MANAGING DIRECTOR AT LANDCOLT TRADING IN WILMINGTON, DELAWARE

“GE is just following along with the trend of 82 percent of companies that have beaten profit expectations. However, if you look into the details, that beat came at the expense of human capital, and we’re still not seeing the growth we had experienced in previous quarters. In addition, there’s a curbing of enthusiasm for the upcoming quarters because of the potential slowdown in Europe and possibly China.”

JACK DE GAN, CHIEF INVESTMENT OFFICER OF HARBOR ADVISORY CORP IN PORTSMOUTH, NEW HAMPSHIRE, A LONGTIME GE SHAREHOLDER

“The organic revenue growth in the industrial business was great at 11 percent. That’s really impressive.”

“Capital was flat quarter on quarter, that’s pretty much as expected. Capital is going to have a good year. The hard thing about determining what capital is going to do is how quickly they run down ending that investment and how big a charge they decide to take against the real estate portfolio. That’s been coming down every quarter.”

“Earnings growth is expected to be around 12 percent this year and 14 percent next. That’s in the Street and investors’ expectations.”

“GE will stand out. Industrials in general will do probably better than the S&P. But GE has been a disappointment for a long time ... it is now finally going to get back to where its earnings can compound at a rate better than the S&P for a while.”

GE is an industrial company and a finance company. Both of those things are quite cyclical. They’ll suffer if we get an economic slowdown. The component of their business that comes from growth markets is much higher than it used to be.”

Reporting by Scott Malone, Ryan Vlastelica and Nick Zieminski, Compiled by Tiffany Wu

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