Sales and profit growth for GE Healthcare (NYSE:GE) were sorely needed bright spots during the second quarter for its parent company, which saw its overall profits halved on a nearly -12% top-line slide but still managed to eke out revenue and earnings beats.
GE Healthcare put up profits of $826 million on sales of $4.70 billion for the three months ended June 30, for gains of 5.6% and 3.9%, respectively, compared with Q2 2016.
But GE’s overall profits plunged -52.0% to $1.35 billion, or 15¢ per share, on sales of $29.56 billion – a -11.8% slide. Adjusted to exclude one-time items, earnings per share were 28¢, 3¢ above the consensus estimate on Wall Street, where analysts were looking for sales of $29.02 billion.
“GE’s portfolio enables us to execute in a slow-growth, volatile environment, with industrial segment organic revenues +2% and orders +6%,” chairman & CEO Jeff Immelt said in prepared remarks. “We expect cash flow to continue to improve throughout the year. We’ve reduced our industrial structural costs year-to-date by $670 million and we are on track to meet or exceed our $1 billion cost reduction target for the year. The global scale of the company, along with our ability to innovate industry-leading products and services, will help us navigate the current environment and unlock productivity across our businesses and markets.
“We’re looking forward to a smooth transition of the CEO position on August 1, when John Flannery becomes CEO. Since the outcome of the Board’s succession planning process was announced in June, John and I have been spending a lot of time together discussing this unique role and what he can expect in the months and years ahead. I am as confident as ever that John is going to be an outstanding leader of this great company,” Immelt added.
GE’s closely watched cash flow from operations fell 67 percent to $3.6 billion from a year ago, reflecting the loss of contributions from the appliances division that the company sold.
But the figure was up from $400 million in the first quarter, and GE said it expects cash flow to increase during the remainder of the year.
The company affirmed its full-year forecast for cash flow, profit, revenue and operating margin.
GE shares, which closed down -0.9% at $26.69 yesterday, rose as much as 1.4% to $27.05 today in pre-market trading before subsiding to $26.71 for a 0.1% gain.
Material from Reuters was used in this report.