General Electric continued to face the impact of a weak economy after its net income dropped 51% from $4.31bn a year earlier to $2.5bn this quarter, or $0.23 from $0.43 on a per share basis. The result is completely far from the $0.20 profit analysts were expecting.
For the bellwether, its financial arm GE Capital continued to be the drag. Revenues in the division dropped 30% while the overall topline decreased by 20% to $37.8bn. Profitabiltiy of GE Capital plunged 87%.
CEO JEff Immelt commented on the division in its press release:
“While it remains a tough environment for GE Capital, we are seeing signs of stabilization. Every segment at GE Capital was profitable with the exception of Real Estate, which is experiencing a tough environment but where we believe the risks are well understood and manageable.”
The weakness in the financial arm was offset by strong performance in the company’s consumer and industrial operations. The earnings for both grew 149%. There was also something good to be taken from the business’s energy-infrastructure and media units, after their profits grew 11% and 13% respectively.
Commenting on the Q3 results, Immelt said:
“In a global economic environment that is beginning to slowly recover, GE delivered solid third-quarter business results. We continue to execute on our plan at Capital Finance, perform well in a slow-growth industrial environment and strengthen the balance sheet with strong cash generation. We are aggressively controlling costs, increasing our industrial backlog while expanding margins, and capitalizing on strong services performance.”
Without the result of GE’s financial arm, the company would have had a much stronger quarter.