The Boston-based industrial conglomerate reported profits of $3.55 billion, or 40¢ per share, on sales of $27.29 billion for the three months ended March 31, compared with Q1 2018 losses of -$1.18 billion. Sales were off -1.8% compared with the same period last year.
Adjusted to exclude one-time items, earnings per share were 14¢, a full nickel ahead of the consensus on Wall Street, where analysts were looking for revenues of $27.05 billion.
“We saw progress in the first quarter as we continued to execute on our priorities to improve our financial position and strengthen our businesses,” chairman & CEO Lawrence Culp Jr. said in prepared remarks. “During the first quarter, GE continued to take action to improve its financial position and strengthen its businesses. The Company announced the sale of BioPharma to Danaher for more than $20 billion in cash proceeds, expected to close in the fourth quarter of 2019, and closed the merger of GE Transportation with Wabtec, resulting in $2.9 billion of cash proceeds and a 24.9% ownership stake in Wabtec. GE Capital completed $1.1 billion of asset reductions and paid down $2 billion of external debt. GE also recently reached final agreement with the United States Department of Justice to settle the FIRREA investigation of WMC for $1.5 billion, as previously reserved and disclosed.
“I am encouraged by the improvements we are making inside GE. This is one quarter in what will be a multi-year transformation, and 2019 remains a reset year for us. We continue to focus on reducing leverage and improving the underlying performance of our businesses to create sustainable, long-term value for our customers, employees, and shareholders,” Culp said.
GE said it still expects to report adjusted EPS of 50¢ to 60¢ this year. Investors reacted to the results by pushing GE shares up as much as 8.1% to $10.51 apiece today in pre-market trading.
GE Healthcare boosts bottom line despite flat sales
The GE Healthcare business the company decided to hold onto after dealing the biopharma biz posted a 6.3% gain to $781.0 million, on a sales decline of -0.4% to $4.68 billion. GE said the profit gain was driven by volume and cost productivity, “partially offset by inflation, price and program investments.”