General Electric on Friday posted better-than-expected profit for the third quarter on higher jet engine sales and cost-cutting measures.
Net earnings for the Fairfield, Conn.-based company fell 29% from a year earlier, to $2.51 billion, or 25 cents per share. Its adjusted earnings of 29 cents a share exceeded the average estimate of analysts by three cents, according to Thomson Reuters I/B/E/S.
GE’s revenue fell 1.3%, to $31.68 billion, with revenue in its oil and gas segment dropping 16% due to lower crude prices. However, industrial revenue rose 4%, excluding the impact of foreign currency swings and acquisitions, and revenue in the aviation segment was up 5%.
The company maintained its profit forecast for its core industrials segment of $1.13 to $1.20 per share for the full year.
GE’s orders dropped 26% with a big decline in oil-related orders, but Edward Jones analyst Jeff Windau told Reuters that GE “had some big orders last year so the comparison was pretty tough.”
Nick Heymann, an analyst at William Blair, told CNBC that oil and gas drillers are still struggling through more than a year-long rout in commodity prices. As a result, he does not expect end-market demand for GE products to pick up until perhaps 2017.
Separately, GE said it expected to retire as much as 7% of its outstanding floated shares by mid-November, as it completes the spinoff of its former retail finance business, Synchrony Financial.
“The Synchrony split is part of GE’s massive retreat from financial services, which began in earnest in April when it said it would divest some $200 billion worth of its GE Capital financing assets to focus on industrial manufacturing,” Reuters explained.
Including the Synchrony split, GE expects to return about $30 billion in cash to shareholders this year through GE Capital divestitures.