MICHELLE CHAPMAN, AP Business Writer
(AP) — General Electric narrowed its losses in its third quarter as it trimmed expenses and managed to post an adjusted profit that surprised Wall Street.
GE lost $1.19 billion, or 13 cents per share, for the three months ended Sept.30. A year earlier the Boston-based company lost $9.47 billion, or 15 cents per share.
Earnings, adjusted for one-time costs and asset impairment costs, were 6 cents per share. That beat the expectations of analysts surveyed by Zacks Investment Research, who were calling for a loss of 6 cents per share.
Total costs and expenses dropped to $20.56 billion from $24.77 billion.
CEO Larry Culp said, “I am proud of the GE team’s work in the third quarter to build momentum while continuing to protect the safety of our employees, serve our customers and communities, and preserve GE’s strengths. We are improving our profit and cash performance with organic margin expansion in every segment except Aviation, though orders more broadly remain under pressure. While our work continues, GE’s transformation is accelerating, and we expect Industrial free cash flow to be at least $2.5 billion in the fourth quarter and positive in 2021. We remain focused on unlocking upside potential for the long term.”
“We are managing through a still-difficult environment with better operational execution across our businesses, and we are on track with our cost and cash actions,” Culp continued.
GE lowered its debt by $2.6 billion in the third quarter. For the year to date, it has reduced debt by $11.7 billion, including $8.1 billion in GE Industrial debt and $3.6 billion in GE Capital debt.
Quarterly revenue declined to $19.42 billion from $23.36 billion, but still topped the $19.15 billion that analysts predicted.
Total orders climbed 31% to $15.5 billion.
Earlier this month GE said that federal regulators may take action against it for possible violations of securities laws, signaling a new phase in ongoing federal investigations into the company’s accounting practices.
GE is the subject of several federal investigations. The SEC has been looking into the company’s $22 billion write-down of its power division, which was disclosed two years ago. The company has said that charge was related to GE’s acquisition of Alstom, a French power and grid business that GE acquired just before the gas turbine market peaked.
The SEC also has been investigating how GE took a $15 billion hit after a subsidiary, North American Life & Health, miscalculated the cost for the care of people who lived longer than projected.
The Justice Department also has investigated GE over its accounting practices. After one of the probes, the company agreed to pay a civil penalty of $1.5 billion in 2019 for alleged misrepresentations about subprime loans included in residential mortgage-backed securities.
View the full earnings report here.
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