GE Manages to Please on Earnings

Jon C. Ogg

General Electric Co. (GE) is out with its fourth-quarter earnings, and it seems that the conglomerate has managed to please its critics. Operating earnings per share came in at $0.53, or $5.4 billion in total. The company also showed that its revenues rose by 3% to $40.4 billion.

Thomson Reuters had estimates of $0.53 in earnings per share and $40.22 billion in revenue. GE's operating margin came in at 18.3%, for a gain of a full point. Orders were up by 8%, and GE is also claiming a record order backlog that was $15 billion higher than last quarter at $244 billion.

GE's unit-by-unit breakdown is as follows:

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  • Industrial segment profits rose 12% to $5.5 billion, with six of seven of GE's industrial segments turning in positive earnings growth.

  • Infrastructure orders for the quarter were up 8% to $30.7 billion.

  • Industrial segment revenues grew 6%, with organic growth of 5%.

  • Growth market revenues were up 10% for the quarter, with double-digit growth in six of nine growth regions, and growth market orders were up 13%.

  • Services revenue grew 6%, with gains in most segments.

  • General Electric Capital Corp. estimated Basel 1 Tier 1 common ratio rose 1.2% to 11.4%, and net interest margin was strong at 5%.

  • Cash generated from GE operating activities in 2013 totaled $17.4 billion, excluding $3.2 billion of NBCUniversal deal-related taxes.

  • Cash generated from Industrial operating activities, excluding the NBCUniversal deal-related taxes, totaled $11.5 billion.

Chairman and CEO Jeff Immelt said:

GE ended the year with strong fourth-quarter earnings and margin growth in an improving but mixed environment. We saw good conditions in growth markets, strength in the U.S., and a mixed environment in Europe. We had strong operating performance for the year and are pleased with our execution in 2013, taking $1.6 billion of cost out, growing margins, reducing the size of GE Capital, and returning more than $18 billion to shareholders.

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GE shares closed at $27.20 on Thursday, and the stock is indicated up 0.9% at $27.45. The 52-week high is $28.09, and the consensus analyst price target is up at $29.27.

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