General Electric shares gyrated Friday after the company reported earnings that beat Wall Street’s expectations but reported a 12 percent drop in revenue.
Here’s how the company did compared with what Wall Street expected, according to Thomson Reuters:
- EPS: 28 cents vs. 25 cents; down from 51 cents in last year’s second quarter.
- Revenue: $29.558 billion vs. $29.015 billion; down from $33.49 billion last year.
Shares of GE were up more than 1 percent in premarket immediately after the announcement, then fell slightly to trade little changed.
The drop in revenue came as weakness in its energy connections business offset strength in renewables and power units.
GE’s energy connections business provides electrification and automation products to the oil and gas, mining, utility and marine industries.
GE’s closely watched cash flow from operations fell 67 percent to $3.6 billion from a year ago, reflecting the loss of contributions from the appliances division that the company sold.
Net profit slumped 58 percent to $1.34 billion, or 15 cents a share, in the quarter ended June 30, from $3.30 billion, or 36 cents a share, a year earlier.
“We’ve reduced our Industrial structural costs year to date by $670 million and we are on track to meet or exceed our $1 billion cost reduction target for the year,” Chairman and CEO Jeff Immelt said in an earnings release.
“The global scale of the company, along with our ability to innovate industry-leading products and services, will help us navigate the current environment and unlock productivity across our businesses and markets.”
The company affirmed its full-year forecast for cash flow, profit, revenue and operating margin.
The earnings report came one month after GE announced that Immelt will step down, a management shake-up that many people saw coming.
After the release on Friday, GE shareholder Jack DeGan told CNBC that GE’s new chief will likely “lower the bar” as a starting point for GE’s future.
“Usually when a new CEO comes in, especially after a long standing previous CEO, they want to lower the bar because that’s where their starting point begins,” DeGan, chief investment officer at Harbor Advisory, said on “Squawk Box.”
—Reuters contributed to this report.