General Electric (NYSE:GE) shares took a hit today after the industrial conglomerate missed the consensus forecast for its second-quarter sales, despite topping the earnings forecast and raising its outlook on the rest of the year.
Boston-based GE posted losses of -$61.0 million, or -1¢ per share, on sales of $26.79 billion for the three months ended June 30, swinging to red ink on a -1.3% sales decline compared with Q2 2018. Adjusted to exclude one-time items, earnings per share were 17¢, a full nickel ahead of Wall Street, where analysts were looking for revenues of $28.68 billion.
“We made steady progress on our strategic priorities in the second quarter. Our top-line growth was solid, and power made meaningful improvements on fixed cost reduction and project execution. Margins contracted due to declines in power, renewable energy, and to a lesser extent aviation, with the first half of 2019 in line with our full-year outlook. We also moved our grid solutions equipment and services business to renewable energy to offer end-to-end clean energy solutions and moved our grid solutions software business to digital, which resulted in a non-cash goodwill impairment charge,” chairman & CEO Lawrence Culp Jr. said in prepared remarks. “Due to improvements at power, lower restructuring and interest, higher earnings, and better visibility at the half, we are raising our full-year outlook for industrial segment organic revenues, adjusted EPS and industrial free cash flows, and we are holding our margin guidance. We will continue to take planned actions to improve our businesses and monitor some market headwinds, and we remain focused on driving continuous improvement and delivering for our customers. I am encouraged by our team’s progress and dedication to date.”
GE said it now expects to put up adjusted EPS of 55¢ to 65¢ this year, up from 50¢ to 60¢ previously.
Still, investors sent GE shares down -1.2% to $10.40 apiece today in mid-day activity.
Healthcare profits rise despite flat sales
Profits for GE Healthcare grew 3.5% to $958.0 million on a -0.9% sales decline to $4.93 billion. GE said the profit gain was driven by “volume and cost productivity, partially offset by inflation, tariffs, and program investments.”