(Reuters) - General Electric Co GE.N on Wednesday renewed its forecast for strong earnings growth over the next two years despite weak energy markets, and said it expects to further build its 3-D printing and services businesses while selling other franchises.
In affirming a target of $2 a share in operating earnings in 2018, Chief Executive Officer Jeff Immelt said GE would overcome expected weakness in its oil and gas business next year and dropped cautiousness the company had expressed in October.
GE’s target was slightly above analyst consensus estimates, and up from a range of $1.60 to $1.70 a share the company forecast on Wednesday for 2017. GE’s 2016 estimate is $1.48 to $1.52 a share.
Immelt said GE will sell its $3 billion industrial solutions businesses along with its water business by mid-2017, and expects net proceeds of $4 billion.
Immelt also stumped for U.S. tax reform, a functioning Export-Import Bank and globalization. GE has backed those policies before.
In a reference to the U.S. election and President-elect Donald Trump, Immelt said it was important for GE “to be able to explain the difference between globalization and outsourcing.” The 20-year-old notion of products being made in Mexico for U.S. consumers no longer fits GE’s global operations, he said.
“Over the last 15 years, 85 percent of our gas turbines and jet engines have been sold outside the United States,” Immelt said. “That’s globalization today.”
GE said it expects to be making more than 500 production parts with 3-D printers by 2020, up from an expected 15 parts in 2017, cutting manufacturing costs by at least $3 billion.
The acquisition of Baker Hughes Inc BHI.N that GE announced in October, will cut 2 cents a share from earnings next year, but will add 4 cents in 2018, the company said.
GE said it expected 2017 revenue of about $135 billion, above estimates of $122.72 billion. It expects to return between $19 billion to $21 billion to investors next year, compared with $30 billion in 2016.
GE’s shares were little changed at $31.55 in after-market trading on Wednesday.
Reporting by Alwyn Scott in Seattle and Anya George Tharakan in Bengaluru; Editing by Shounak Dasgupta and Jonathan Oatis
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