23 Jan 15. GE industrial profit rises despite flagging oil unit sales. General Electric Co reported a 9 percent rise in quarterly industrial profit on Friday as its businesses that sell power-generating turbines and jet engines helped offset weak sales in its oil and gas unit. Investors have been concerned that plunging oil prices will hurt GE’s sales of oil equipment if customers slash spending. Orders in the unit also fell. “It’s going to be an albatross … as long as energy prices stay low,” said Tim Ghriskey, chief investment officer of Solaris Asset Management. “The sentiment on GE is very negative here, and I don’t see anything in the quarter that is going to change that.” GE Chief Executive Officer Jeff Immelt said the U.S. conglomerate, which is shifting its focus even more to industrial operations and away from finance, recognized the risks from low oil prices. But he pointed to other areas of strength, including the improving U.S. economy. “The GE world remains balanced,” Immelt said on a conference call with analysts. “Our job is to manage the company through volatility.” Fourth-quarter net income rose 61 percent to $5.15bn, or 51 cents per share, from a year earlier, when results suffered from GE’s move to resolve financial obligations to Japan’s Shinsei Bank. Excluding pension-related costs, earnings of 56 cents per share were 1 cent ahead of the analysts’ average estimate, according to Thomson Reuters I/B/E/S. Revenue rose 4 percent to $42bn, just missing Wall Street estimates of $42.16bn. Shares of GE rose 1.8 percent in morning trading, while rival Honeywell International Inc, whose sales and earnings both narrowly beat expectations, gained 3.4 percent. GE’s organic industrial revenue, which excludes the impact of foreign exchange fluctuations and deals, increased 9 percent. Sales in the power and water unit, which sells a variety of turbines and is GE’s biggest industrial segment, rose 22 percent, while the aviation division’s sales increased 4 percent. Revenue at the oil and gas division slumped 6 percent but was flat on an organic basis. Orders at the unit, which sells oil and gas equipment and services, fell 4 percent on an organic basis, but its quarterly profit edged up 1 percent. GE’s profit margin for the industrial businesses, which Wall Street watches closely, rose by 0.5 percentage points to 18.8 percent. The company is cutting costs and simplifying operations to lift margins. Through Thursday, GE shares were off 4 percent so far in 2015, against a slight increase for the Standard & Poor’s 500 index. (Source: Reuters)
22 Jan 15. Rockwell Collins, Inc. (NYSE: COL) reported total sales for the first quarter of fiscal year 2015 of $1.23bn, a 16% increase from the same period in fiscal year 2014. First quarter fiscal year 2015 earnings per share from continuing operations increased 29% to $1.26 compared to $0.98 in the prior year. Earnings per share for the first quarter of fiscal year 2015 included a benefit of 16 cents due to the retroactive extension of the Federal R&D tax credit. ARINC, which was acquired on December 23, 2013, and is included in the Information Management Services segment, contributed $137m of sales and $20m of operating earnings to the first quarter of fiscal year 2015.
“We’re off to a great start on our fiscal 2015 plan,” said Rockwell Collins Chief Executive Officer and President, Kelly Ortberg. “In the quarter we realized strong revenue growth in our Commercial Systems and Information Management Services businesses and a stabilization of revenues in our Government Systems business. With this return to top-line growth, we executed quite well and delivered improved margin performance. The results for the first quarter support our plan for double digit earnings per share and cash flow growth for fiscal year 2015.” Ortberg continued, “We also secured another pillar for our long-term growth plan with the significant market share gain on the Boeing 777X. This builds on our posit