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 Shares of GE rose 4 percent to $25.21 in premarket trading.
The U.S. conglomerate posted a 4 percent rise in organic revenue,
which excludes acquisitions, for its industrial manufacturing
businesses, on which Chief Executive Officer Jeff Immelt is
increasingly focusing the company.
Although that quarterly growth did not meet some analysts'
expectations, GE said such revenue was on track to hit the higher
end of its projected range of 4 percent to 7 percent growth for
2014.
Reaching that high end "would be quite a pickup," said Tim Ghriskey,
chief investment officer with Solaris Asset Management, which owns
GE shares.
"They were able to engineer the earnings in industrials," Ghriskey
said. "It’s just that the revenues were relatively weak.
"The stock is reflecting more forward-looking statements than
third-quarter results."
Like those of other diverse U.S. manufacturers, GE's shares had been
underperforming the broader market this year amid concerns about a
soft global economy, after a big run-up in 2013.
"The environment is volatile, but infrastructure growth
opportunities exist, and GE is executing well," Immelt said in a
statement.
Immelt is seeking to boost GE's earnings contribution from its
industrials businesses, which include jet engines and oil and gas
equipment, to 75 percent by 2016 from 55 percent last year, while
reducing its exposure to the GE Capital finance unit.
GE's third-quarter net income rose to $3.54 billion, or 35 cents per
share, from $3.19 billion, or 31 cents per share, a year earlier.
Excluding pension costs and other special items, earnings of 38
cents per share topped the analysts' average estimate by 1 cent,
according to Thomson Reuters I/B/E/S.
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Revenue rose 1 percent to $36.17 billion, below the $36.79 billion
that analysts expected.
Sales fell 2 percent at the power and water segment, which sells
energy-producing turbines and is GE's biggest industrial division.
But GE projected sales growth of at least 10 percent in the division
for the fourth quarter.
GE's profit margin for its industrial businesses came in at 16.3
percent, expanding by 0.9 percentage points from a year earlier. The
company pointed to its efforts to simplify its operations through
cost cuts and a wider gap between the price of its products and the
expense of producing them.
GE has targeted increasing its industrial profit margins to 17
percent by 2016 from 15.7 percent last year. The expansion in the
quarter indicated the company was "well on their way" to meeting
that goal, said Perry Adams, portfolio manager at Northwestern Bank.
(Reporting by Lewis Krauskopf; Editing by Lisa Von Ahn)
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