NEW YORK: General Electric Co beat analyst profit forecasts in the third quarter, but revenue growth remained sluggish, prompting the company to lower its full-year revenue growth target and narrow its profit forecast on Friday and sending shares lower.
The industrial giant's adjusted profit jumped 10 percent to 32 cents a share, beating the 30 cents that analysts had estimated on average, according to Thomson Reuters I/B/E/S. GE also raised its full-year target for cash returned to shareholders to $30 billion from $26 billion and noted it had returned $25 billion in the first three quarters.
But slow economic growth, particularly in the oil and gas business, weighed on revenue. Organic revenue, which excludes growth from acquisitions, grew 1 percent in the quarter.
The company's shares were down 0.6 percent at $28.90 in premarket trading, after earlier falling as much as 1 percent. Analysts had been looking for GE to report stronger revenue growth after a weak first half, but that was stymied by a 25-percent slump in oil and gas revenue in the quarter.
While analysts expect second-half growth of about 15 percent in the power business, GE's largest division, power revenue grew just 7 percent in the third quarter.
GE trimmed its full-year revenue forecast to flat to 2 percent growth, down from 2 percent to 4 percent growth.
It narrowed its adjusted profit forecast to between $1.48 and $1.52 a share, compared with the $1.45 to $1.55 a share forecast at the end of the second quarter.
The company lifted its cash flow outlook, which it said allowed the boost in share buyback plans by an additional $4 billion.
It now expects free cash flow and dispositions to total at least $32 billion, up from a range of $29 billion to $32 billion it forecast at the end of the second quarter. GE's net income from continuing operations rose to $2.10 billion in the third quarter ended Sept. 30 from $1.97 billion a year earlier.
Earnings per share from continuing operations rose to 23 cents from 19 cents.
Total revenue rose 4.4 percent to $29.27 billion.
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