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GE delivered quarterly earnings figures on October 16 that exceeded analysts’ expectations, as its businesses producing jet engines and power turbines offset declines in its oil and gas segment. However, revenue fell short of Wall Street estimates.
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GE said that it plans to launch a share exchange for the Synchrony Financial division, GE’s consumer finance arm, after winning approval from the Federal Reserve. Jeff Immelt, Chief Executive of GE, said that he was confident that the $3.3 billion sale of its appliances unit to Sweden’s Electrolux would close this quarter, despite a challenge from US regulators.
Revenue in GE’s aviation segment grew 5 per cent, while revenue in its power and water segment grew just 1 per cent. This was primarily a result of a reshuffle in GE’s operating portfolio to reduce volatility in earnings associated with the financial businesses of GE Capital and focus on the strong industrial parts of the company.
GE has said that it intends to continue with its strategy of divesting itself of its financial operations, and focus on industrial manufacturing. It said it had plans to divest $200 billion of its capital financing assets, which it would use to expand its industrial base. GE’s costs have fallen sharply, by 7 per cent to $6.7 billion.
Bloomberg has reported that GE is will invest $10 billion in its newly created digital unit.
Overall, these results, combined with GE’s stated strategy, suggest that it will continue to be active in acquisitions to strengthen its industrial base.