General Electric Corporation (NYSE:GE) Aims to Alleviate its Industrial Sector
General Electric Corporation (NYSE:GE) unveiled their earnings for the third quarter, where they are earning considerable profit because of significant airplane deliveries and oil and gas equipment shipments. The profits are juggling with minor losses struck because of a few other categories. The industrial behemoth’s top line made a profit of 1 percent in this quarter while on the other hand there was a minor loss from the financial wing. GE Capital cost GE (NYSE:GE) some profit because of them insisting on selling noncore assets and getting a lower gain.
GE (NYSE:GE) is now focusing on its infrastructure and scope of the industrial operations, meanwhile minimizing its operations on GE Capital. Initially, GE (NYSE:GE) was aiming for a 4-7 percent industrial growth with 10 percent industrial development but it didn’t turn out that way. It’s being predicted that GE (NYSE:GE) stock price will rise to 28.33, which is 15 percent ahead of the market price.
3rd quarter earnings were fueled by aviation and oil sector making almost 40 percent of GE (NYSE:GE)’s industrial revenue. Jet engines are in demand because of the rise in commercial planes- this factor is falling into favor as its core operations are aviation, oil and gas.
GE (NYSE:GE) gained additional capital because of cost cutbacks in the third quarter. For the next full year however the company plans to remove 1 billion from its structural costs. Cost cutbacks enabled the company to gain almost 9 percent in the industrial region even though the year over year industrial revenue was a mere 3 percent.
GE (NYSE:GE)’s industrial revenue suffered a bit because of the financial segment. GE Capital’s third quarter earnings were afloat in a pool of losses because of a receding asset base. It’s ironic since half a decade ago the financial segment was GE (NYSE:GE)’s strong sector, but things haven’t been the same ever since the financial meltdown in 2008.
After the third quarter earnings, General Electric Corporation (NYSE:GE) has made it clear that it will be focusing on its core capabilities rather than the segments that are pulling the profits down. The company sold its electronic appliances business Electrolux for 3.3 billion dollars. All these changes in the portfolio will result in a 75 percent earnings from the industrial sector, 15 percent more than the current earnings by the year 2016.
GE (NYSE:GE) has realized that focusing on the industrial market will beget the company heaps of profit. The financial segment has already cost the company major proportions and now it is essential for the company to maximize its strengths; stay riveted on the profits rather than juggling over segments that are shrouded by a cloud of losses.
The boom in the oil and gas sector will also create significant future prospects for the company; it’s just a matter of time when General Electric Corporation (NYSE:GE) would again become one of the largest conglomerates in the industrial market.