New York, 22 Oct - General Electric Co scaled back expectations for its full-year revenue and profit on Friday, overshadowing third-quarter profit that beat analyst forecasts and sending its shares lower. Weak global economies and low oil prices hit the industrial giant's sales of oil and gas infrastructure equipment especially hard. This limited GE's organic revenue growth, which excludes acquisitions, to just 1 percent in the quarter.
The company's shares were down 0.9 percent at $28.81 in afternoon trading on the New York Stock Exchange. Earlier the stock fell 2 percent, the biggest decliner in the Dow Jones Industrial Average index. On the plus side, GE's adjusted quarterly profit jumped 10 percent to 32 cents a share, exceeding the 30 cents that analysts had estimated on average. Analysts said the beat was not a complete surprise since they had recently trimmed estimates by two or three cents. 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.
The company lifted its cash flow outlook to at least $32 billion, up from a range of $29 billion to $32 billion it forecast at the end of the second quarter. But GE trimmed its full-year revenue forecast to flat to 2 percent growth, down from 2 percent to 4 percent growth. It also 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.
GE's weak revenue largely reflected the continuing reluctance of oil and gas companies to make new long-term investments, despite signs that the market is picking up, GE officials said. GE's oil and gas segment revenue slumped 25 percent in the quarter, disappointing analysts, who had been hoping GE would report stronger revenue growth after a weak first half. -Reuters
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