GE slashes revenue target on oil and gas weakness

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.

Source: Arab News