General Electric Company (NYSE:GE)’s third quarter net income increased to $3.5 billion, or $0.33 per share compared with its previous earnings of $3.2 billion, or 22 cents per share, during the same period last year. The company’s revenue climbed from $35.36 billion to $38.35 billion.
The company’s third quarter adjusted earnings of $0.36 per share met the $0.36 per share consensus estimate of analysts. Its revenue fell short of the $36.94 billion expectations of analysts, based on the data compiled by Thomson Reuters I/B/E/S. The company explained that the fluctuation in foreign exchange rates reduced its third quarter revenue by $1.1 billion.
According to Jack DeGan, chief investment officer at Harbor Advisory Corp, “The market will see this as a slight disappointment. They met expectations for earnings, and they were light on revenues. If you add back Forex, they beat.”
On the other hand, analysts from Deutsche Bank Market Research said GE’s third quarter financial performance improved, and its earnings were in-in line with their expectations.
General Electric Company (NYSE:GE)’s Industrial and GE Capital business segments generated double-digit earnings growth (11%) this year.
In a statement, General Electric Company (NYSE:GE) Chairman and CEO Jeff Immelt said, “The overall environment remains challenging, but GE continues to execute on our growth strategy. GE’s Industrial segments delivered another quarter of strong organic revenue growth, and we ended the quarter with a robust backlog. As expected, our margins increased 70bps over the prior year period, with margin expansion in all five Industrial segments.”
He stated further, ‘we had a good third quarter in a challenging environment. Europe is tough. Asia and resource-rich countries are okay. And the US had pockets of growth, but still some uncertainty.’ Translation, China and Europe are slowing down and Jeff Immelt seems concerned.
The company also remains focused in downsizing the assets of GE Capital by $425 billion by the end of 2012. GE generated $10.7 billion cash from its operating activities, and ended the third quarter with $85 billion of consolidated cash and cash equivalents.
General Electric Company (NYSE:GE)’s stock price declined by almost 3 percent to $22.17 per share at the New York Stock Exchange on Friday morning.
On the other hand, McDonald’s Corporation (NYSE:MCD)’s third quarter income declined to $1.46 billion, or $1.43 earnings per share from its income during the same period last year of $1.51 billion, or $1.45 earnings per share.
The company fell short of the $1.47 earnings per share average estimate of analysts, according to Thomson Reuters I/B/E/S.
McDonald’s Corporation (NYSE:MCD) total sales declined from $7.17 billion to $7.15 billion.
According to analysts from Morgan Stanley (NYSE:MS), McDonald’s Corporation (NYSE:MCD)’s sales in September and October are worse. They said, “Outlook for October trending negative is not encouraging, even in light of a negative 2.1% trade day shift.”
On the conference call, one of the executives (the transcript did not identify which one) from Mcdonald’s states:
Japan’s recovery continues to be uneven and China’s more recent economic slowdown are all impacting performance.