General Electric Co reported a higher-than-expected quarterly profit yesterday, but a closely watched revenue measure declined, raising questions about the company’s full-year target.
The industrial conglomerate said organic revenue, which excludes foreign exchange and discontinued operations, fell 1% in the first quarter, but it affirmed its forecast of 2% to 4% growth for 2016. Some analysts had said the top end of that range appeared difficult to achieve due to sluggish demand for oil and gas equipment and a weak industrial economy.
“The oil and gas environment is challenging,” Chief Executive Officer Jeff Immelt said in a statement. But GE was “able to offset this with better performance across the portfolio.”
The company’s shares were down 0.9% at $30.70 in trading before the market opened.
GE said power generation equipment shipments were low in the first quarter, but it expects a pickup in the second half of the year. As a result, second-half organic revenue should be up 5%, helping the company hit its target, executives said on a conference call.
The company said earnings per share, excluding items, rose 5% to 21 cents from a year earlier. Analysts on average were expecting 19 cents, according to Thomson Reuters.
Foreign exchange costs decreased the figure by 2 cents a share.
GE reported a net loss of $98mn, or 1 cent a share, mainly due to non-cash charges from the sale of financial businesses, part of an ongoing divestiture of the GE Capital unit.
The company said it still expected a full-year profit of $1.45 to $1.55 a share, excluding items.