CORRECTED-UPDATE 2-GE revenue beats expectations, calming nerves
(Deletes reference to "energy customers" in 1st paragraph; changes "sales" to "orders" in 5th paragraph)
April 19 (Reuters) - Strong sales to aviation customers helped General Electric Co's first-quarter revenue beat Wall Street expectations on Friday, assuaging fears of a miss after a lukewarm report on March U.S. factory activity.
The world's biggest maker of jet engines and electric turbines said revenue rose slightly to $35 billion, surpassing the $34.51 billion analysts had expected, according to Thomson Reuters I/B/E/S.
"That is a beat on revenue, and that's important because the Street has been very worried about revenue numbers at industrial firms because the quarter appears to have tailed off in March," said Jack DeGan, chief investment officer at Harbor Advisory Corp in Portsmouth, New Hampshire, which owns GE shares.
The Institute for Supply Management said earlier this month that U.S. factory activity grew at the slowest rate in three months in March, suggesting the economy lost some momentum at the end of the first quarter.
While investors and analysts await more information on sales from GE Chief Executive Jeff Immelt on an earnings conference call, GE said in a statement that orders from aviation customers jumped 47 percent and orders from energy customers rose 24 percent in the quarter.
GE's order backlog - a closely watched indicator of future sales - rose to $216 billion from $210 billion in the fourth quarter of 2012. Backlog can be a positive sign that customers are willing to wait in line for a company's products, or a sign that a company is having a hard time meeting demand. GE's backlog has grown consistently in recent quarters.
"To me, when you see a trend, year over year, repeating itself, there's a business management issue. Eventually, that's got to change," said Oliver Pursche, president of Gary Goldberg Financial Services, which owns GE shares.
GE said European sales have been weaker than expected, offset by strength in emerging markets. The company said it will slash costs by $1 billion this year, part of an effort to offset weak sales.
"We expect our cost-out efforts will mitigate weakness in specific markets, and we have a very strong cash position," Immelt said in a statement.
Fairfield, Connecticut-based GE said it earned $3.53 billion, or 34 cents per share, in the quarter, compared with $3.03 billion, or 29 cents per share, a year earlier.
Excluding one-time items, profit was 35 cents per share, matching analysts' average forecast, according to Thomson Reuters I/B/E/S.
GE shares fell 1.2 percent to $22.40 in premarket trading. The stock has gained 8 percent so far this year. (Reporting By Ernest Scheyder; Editing by Lisa Von Ahn and John Wallace)
- Colorado baker discriminated by denying gay couple wedding cake: judge
- Flights delayed as air pollution hits record in Shanghai
- Amish girl in Ohio will not be forced to resume chemo for cancer
- WTO overcomes last minute hitch to reach its first global trade deal
- French launch Central African Republic mission but deaths mount