NEW YORK (AP) — General Electric Corp. earnings rose in the first quarter on increased profit from selling aircraft engines and transportation equipment and the sale of NBC. But results were held back by economic conditions in Europe that were worse than expected.
GE reported net income of $ 3.5 billion, or 34 cents per share, on revenue of $ 35 billion. During last year’s first quarter, GE earned $ 3 billion, or 29 cents per share, on $ 35.2 billion in revenue.
Adjusted to reflect earnings only from continuing operations, GE earned 35 cents per share. That matches what analysts surveyed by FactSet expected. The analysts expected slightly lower revenue of $ 34.5 billion.
But the performance of the company’s core industrial operations were weaker than the company and analysts had anticipated. Sales of industrial equipment and services fell 6 percent and profit fell 11 percent.
GE CEO Jeff Immelt said in a statement that operations in emerging markets and the U.S. performed about as well as expected. But Europe — which he thought would be bad — worsened. Revenue from the region fell 17 percent.
“Some of our markets were more challenging than expected,” Immelt said on a call with investors.
Immelt said he thought the first half of this year would be difficult, but some customers delayed purchases and revenue came in about $ 200 million lower than he had hoped. He expects those customers to come back later in the year, and help improve the company’s performance.
But that’s not what investors wanted to hear. “Investors want to see results now,” said Christian Mayes, an analyst at Edward Jones. “They don’t like the whole ‘wait for the second half of the year’ approach.”
GE shares dropped 90 cents, or 4 percent, to $ 21.77 in morning trading Friday.
Europe’s struggles hit GE’s sales of power generation and water treatment equipment especially hard. Revenue for that division fell 26 percent in the quarter, and profit fell 39 percent.
Profits in the oil and gas segment and GE’s tiny energy management division also slipped in the quarter, offsetting profit gains in aviation, healthcare, transportation and home and business appliances.
“It’s a big company and it takes a lot to get it firing on all cylinders,” Mayes said.
The company’s sale of NBC added earnings of 8 cents per share, while profit rose 9 percent at GE Capital, the company’s finance arm.
GE is in the midst of shaping itself into a more focused conglomerate that sells and services industrial equipment and appliances. It is shedding divisions such as NBC Universal and shrinking its banking operations. GE sold its 49 percent of NBC Universal to Comcast for $ 16.7 billion in the first quarter. Earlier this month, GE announced an agreement to buy the oilfield equipment maker Lufkin Industries Inc. for $ 3.1 billion, as part of a push to grow its oil and gas equipment division.
Orders for oil and gas equipment rose 24 percent in the first quarter. Orders for aviation equipment, powered by a new jet aircraft engine, rose 47 percent.
But GE is not expecting any growth this year from two divisions that make up half the company’s revenue — power and water and GE Capital. That will make growing the company as a whole difficult.
Immelt said the company remains on track for the year, but it will have to aggressively cut costs to meet its targets.
Jonathan Fahey can be reached at http://twitter.com/JonathanFahey .