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GE 1Q earnings up 16%
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April 12, 2001: 4:14 p.m. ET
Conglomerate's earnings hit forecast, overcoming declines at NBC, appliances
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NEW YORK (CNNfn) - General Electric Co. reported a 16 percent rise in first-quarter earnings Thursday, matching Wall Street forecasts.
The highly diversified manufacturer and financial services firm said profits from ongoing operations rose 16 percent to a first-quarter record of $3 billion, or 30 cents a diluted share.
Analysts surveyed by earnings tracker First Call had forecast earnings per share of 30 cents, up from $2.6 billion, or 26 cents a share, a year earlier.
A one-time accounting charge lowered first-quarter net income to $2.6 billion, or 26 cents a share.
GE (GE: up $1.43 to $44.70, Research, Estimates), the world's largest company in terms of market capitalization, makes everything from refrigerators to aircraft engines, medical devices and power systems. It also owns the NBC television network and one of the nation's leading financial services providers, GE Capital, which is the company's largest unit.
Operating profit at GE Capital rose 12 percent to $1.4 billion despite a slip in revenue there. Profit more than doubled at its power system division to $951 million from $453 million, as the unit was helped by strong demand for new generation that equipment drove orders up 68 percent over year earlier levels.
Merrill Lynch analyst Jeanne Terrile said in a research note it was "an exceptionally good quarter for GE." Terrille noted margin was up 17.7 percent despite an extremely tough comparison period.
She said the second quarter will be the toughest for the company, and estimated earnings per share of 39 cents, the same as First Call's consensus estimates .
Analyst Robert Cornell of Lehman Brothers maintained a "strong buy" and $67 price target for GE. The firm's broadcasting and industrial businesses were weak, but its power unit, which surpassed Cornell's expectations of a $550 million profit, offset these drawbacks.
"We think GE could see stronger-than-expected EPS growth when the short cycle [businesses] start to recover while Power Systems stays way stronger than the Street had expected," Cornell said in a research note.
But profit slipped at NBC and at GE's appliances business, both of which also had sales declines.
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Overall sales rose 2 percent to $30.5 billion for the Fairfield, Conn.-based company. The decline in revenue at GE Capital, NBC and appliances was offset by a 33 percent gain to $4.3 billion at its Power Systems unit and a 12 percent increase to $2.7 billion at its aircraft engines division.
Merrill's Terrille said the revenue included a lot of "footnotes," and without divestitures revenue rose about 8 percent.
CEO Jack Welch said the results, in the face of a difficult economic environment, position the company for a record year, although his statement did not include more specific guidance. First Call forecasts full-year EPS of $1.47, up from $1.27 in 2000, with sales seen climbing to $143 billion from $129.9 billion last year. 
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