Conglomerate General Electric Co., the Fairfield parent of WVIT Channel 30 in West Hartford, said Friday that its first-quarter earnings fell 32 percent, but the industrial and financial bellwether said it saw signs of improvement in its own results and the broader economy, The Associated Press reports.
GE’s first-quarter performance was a further reminder of the major challenges it faces as tries to return to profit growth. Its GE Capital lending unit posted a profit but losses remained high in areas like commercial real estate. GE’s industrial units, which it is relying on to lead it out of the recession, also posted lower sales.
GE’s earnings beat Wall Street forecasts but revenue came in below expectations and its shares fell 52 cents, or 2.7 percent, to $18.98 morning trading.
The company said losses were moderating within GE Capital, The unit’s profit fell 41 percent due to downsizing and a lower tax credit. Chief executive Jeffrey Immelt was optimistic, saying there were positive signs in major sectors like transportation and advertising.
“We saw encouraging economic signs,” Immelt said.
GE said it earned $1.87 billion, or 17 cents per share, after deducting preferred dividends in the January-March period, down from $2.75 billion, or 26 cents per share, a year ago. Revenue fell 5 percent to $36.6 billion from $38.4 billion a year ago.
Excluding $390 million in losses from one-time items, GE’s earnings from continuing operations were $2.4 billion, or 21 cents a share. Analysts polled by Thomson Reuters expected profit of 16 cents a share on higher revenue of $37.1 billion.
GE is considered an indicator of the well-being of the broader economy. It makes industrial products ranging from light bulbs to wind turbines, and is a big lender to businesses and consumers.
The company hopes that those industrial units will lead it out of last year’s recession, and is billing 2010 as a year of transition to renewed growth next year.
But the first quarter results suggest that recovery may take a while to gather steam. Industrial sales were down 2 percent in the quarter on lower sales of jet engines and train locomotives, outweighing better results for products like medical imaging machines and power plant turbines.
GE Capital has been an ongoing problem. Losses soared last year as loans went bad in areas like home mortgages in the United Kingdom and GE Capital’s portfolio of commercial real estate holdings and loans.
The division posted a $607 million profit in the quarter and Immelt said GE saw stabilization as losses and delinquencies declined in the first quarter. The unit was also affected by a much lower tax benefit — $357 million compared to $1.15 billion a year ago.
But the loss in commercial real estate more than doubled to $403 million, an area that will remain a drag on GE’s efforts to rebound.
The NBC Universal entertainment division, which operates Channel 30, also posted a big drop in profits, down 49 percent to $199 million. GE plans to sell a majority stake in NBC to cable operator Comcast, a deal that is expected to close later this year.
