GE reports loss, presses on for Alstom, Electrolux deals

GMT 18:23 2015 Friday ,17 July

Arab Today, arab today GE reports loss, presses on for Alstom, Electrolux deals

GE executives
New York - AFP

General Electric said Friday it would press on to complete deals with Alstom and Electrolux despite resistance from antitrust regulators, as it reported a second-quarter loss due to restructuring costs.

GE executives said they remained committed to the $12 billion purchase of French company Alstom's energy business and to the $3.3 billion sale of its appliances business to Sweden's Electrolux.

"We still like the deal," GE chief executive Jeff Immelt said of the proposed Alstom acquisition.

Immelt told an analyst conference call that the company had submitted remedies in response to European Union regulator concerns that the Alstom deal could lead to too much concentration in the gas-turbine sector.

Competition regulators in Brussels have demanded concessions from GE to win approval. A decision is expected by mid-September, Immelt said.

GE signaled a tough line in response to a lawsuit filed on July 1 by the US Department of Justice to block the Electrolux deal on grounds it would lead to higher prices of key cooking appliances for US consumers.

"We plan to vigorously defend the transaction in court," GE chief financial officer Jeff Bornstein said in the call.

"We are confident the transaction is good for customers and consumers and that acquiring the GE Appliances brand would help Electrolux compete in an increasingly global and intensely competitive industry."

The Alstom and Electrolux deals are important aspects of a strategic shift under Immelt to shed most GE Capital assets and stake more of the company's future on industrial operations.

GE reported a loss of $1.36 billion for the quarter ending June 30, compared with a profit of $3.54 billion a year ago.

The loss follows GE's announcement this month that it would take a $4.3 billion charge related to divestitures of finance assets.

However, operating profits from GE's industrial segment rose 4.6 percent to $4.36 billion. Operating profits rose in five of seven industrial divisions.

GE lifted its 2015 forecast for industrial profits from $1.10-$1.20 per share to $1.13-$1.20 per share.

Strong growth in orders for aviation and renewable energy offset the drop in new orders in oil and gas.

Revenues rose 1.5 percent to $32.75 billion.

"Despite managing a substantial portfolio pivot, our operating execution remains excellent," Immelt said.

Earnings translated into 31 cents per share, three cents above analyst forecasts.

In afternoon trade, Dow member GE was up 0.9 percent at $27.26.


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