GE posts profit increase for Q3

21 Oct 2011

Advanced technology, services and finance company GE has reported third-quarter 2011
operating earnings of US$3.4bn, or $0.31 per share, up 11pc, from the third quarter of 2010.

During the quarter, GE gave notice of redemption for the preferred stock held by Berkshire Hathaway, and subsequently redeemed the shares on 17 October 2011 for US$3.3bn. As expected, the redemption resulted in a $0.08 per share one-time impact.

Including the impact of the preferred redemption, Continuing EPS was $0.22, down 21pc. Net EPS was $0.22, up 22pc. Going forward, retiring the Berkshire preferred stock will improve GE’s annualised earnings per share by $0.03, the company said.

“We are pleased to deliver our sixth consecutive quarter of double-digit operating earnings growth in a volatile macro environment,” GE chairman and CEO Jeff Immelt said.

“We improved earnings, achieved solid double-digit infrastructure order growth, executed on our balanced capital allocation plan and maintained a strong balance sheet. We ended the quarter with a record high order backlog of US$191bn and we remain confident in our full-year 2011 operating framework.”

GE is aggressively investing in its growth platforms. Highlights from the quarter include the closing of GE’s acquisition of Converteam, a provider of power conversion and automation systems and high-efficiency power electronics, motors and generators. GE continued to build its global position, including announcing two Russian joint ventures that will help modernise the US’ healthcare and power-generation sectors.

Highlights of GE’s Q3 2011 financial results:

  • Operating earnings of US$3.4bn, up 11pc
  • Operating EPS of US$0.24; US$0.31 excluding effects of preferred redemption
  • Continuing EPS of US$0.22, down 21pc (includes preferred redemption impact)
  • Net EPS of US$0.22, up 22pc (includes discontinued operations)
  • Leading indicators remain encouraging
  • Total revenues of US$35.4bn
  • Industrial organic revenue growth of 8pc
  • Industrial segment global revenue growth of 25pc
  • Industrial backlog of US$191bn, a record
  • GE Capital earned US$1.5bn, with pre-tax earnings of US$1.6bn