General Electric beats by $0.01, reports revs in-line; 2014 framework unchanged (26.12)
Reports Q1 (Mar) earnings of $0.33 per share, $0.01 better than the Capital IQ Consensus of $0.32; revenues fell 2.2% year/year to $34.18 bln vs the $34.43 bln consensus.
- Industrial sales of $24 billion increased 8% compared to the first quarter of 2013. GECC revenues of $10.5 billion decreased 8% from last year. Industrial segment profits rose 12% to $3.3 billion. Industrial segment margins improved 50 basis points over the prior-year period. Industrial segment revenues grew 8%, with organic growth of 8%. Growth market revenues were up 7% for the quarter, with double-digit growth in five of nine growth regions. Services revenues grew 3%, with double-digit growth in Aviation and Oil & Gas. Equipment revenues grew 12%, on strong new product introductions and solid share positions. The breadth of the GE portfolio was reflected in the quarter as the Company offset market volatility in Appliances, Healthcare, and Mining.
- Infrastructure orders for the quarter were $23.7 billion, flat with the year-ago period. GE's backlog of equipment and services at the end of the quarter was $245 billion, with increases in every segment over the year-ago period.
- GE Capital earnings were flat, with ENI (excluding cash and equivalents) at $374 billion at quarter-end, down $7 billion from last quarter. General Electric Capital Corporation's (GECC) estimated Tier 1 common ratio (Basel 1) rose 32 basis points to 11.4%, and net interest margin was strong at 4.9%. During the quarter, GECC paid $500 million in dividends to the parent.
- Also during the quarter, GE filed a registration statement with the SEC for the IPO of its North American Retail Finance business, the first step in a planned, staged exit from that business. The Company made good progress in accelerating efforts to achieve its simplification goals.
- GE is on track to achieve its goal of $1 billion or more in structural cost-out for the year. Industrial structural costs in the first quarter were down $254 million versus the prior-year period, driven by simplification initiatives and benefits from restructuring investments.
- "We're off to a good start to the year, and our 2014 framework remains unchanged. The environment is consistent with our expectations, with a positive bias. The GE team is executing with strong organic growth, consistent margin enhancement, cash growth with disciplined allocation, and a stronger GE Capital. We are on track for our Retail Finance IPO and remain committed to a GE that has 70% of our earnings from the Industrial businesses. GE is in good shape."