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General Electric Company (GE) Q3 2017 Earnings Miss Sinks Shares

GE Q3 2017 earnings were released before opening bell this morning. The company posted adjusted earnings of 29 cents per share on $33.5 billion in revenue, coming up far short of the earnings consensus at 49 cents per share but beating the revenue estimate of $32.71 billion. In last year’s third quarter, GE reported adjusted earnings of 32 cents per share on $29.166 billion in revenue.

General Electric ge q3 2017 earnings
By General Electric Company (w:File:General_Electric_logo.svg) [Public domain], via Wikimedia Commons
On a GAAP basis, GE Q3 2017 earnings came in at 21 cents per share, a penny lower than the year-ago GAAP earnings result. Net profits fell from $2.03 billion last year to $1.84 billion this year. Industrial segment organic revenues ticked lower by 1% year over year to $26.9 billion, while the industrial operating margin was $11.8% on a non-GAAP basis. The industrial GAAP margin contracted 240 basis points to 7.6%.

“While a majority of our businesses had solid earnings performance, this was offset by a decline in Power performance in a difficult market,” Chairman and Chief Executive Officer John Flannery said in a statement with the GE Q3 2017 earnings release. “Our Industrial CFOA*-a) for the quarter was down principally because of lower Power volume, resulting in lower earnings and higher inventory.”

Orders grew 11% year over year, with equipment orders amounting to $13.9 billion and services orders grew to $15.9 billion for a total of $29.8 billion in orders. Backlog grew 3% year over year to $328 billion, including $84.3 billion in equipment backlog and $243.7 billion in services backlog.

Year to date, General Electric returned $10 billion to shareholders through the end of the third quarter, including $3.7 billion through share repurchases. GE won several major deals during the third quarter, including a deal to supply 800 turbines to the biggest wind farm in America and a commercial agreement to digitize the biggest container port in the U.S., which is the Port of LA. GE also announced that it’s partnering with Apple on apps to help industrial companies tap into Predix predictive data and analytics on iOS devices.

Following the GE Q3 2017 earnings release, the company’s stock tumbled in premarket trades, falling by as much as 7.76% to $21.75 before the bell.

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