General Electric (NYSE:GE) on Friday announced a second-quarter decline in earnings, which came to $3.11 billion (29 cents per share) after the company earned $3.69 billion (35 cents) a year ago. However, adjusted earnings came out to 38 cents, beating analysts’ expectations by 1 cent.
Revenues missed, however — GE’s $36.5 billion brought in was an improvement on the $35.6 billion in revenues a year ago, but short of the $36.8 billion projected by analysts.
GE’s stock was as mixed as the news, dropping at the bell, then headed slightly above water in early Friday trading.
To explain the drop in income, GE pointed to charges of $553 million related to its sale of WMC Mortgage four years ago and an increase in pension costs, as well as the current state of the global economy.
GE was able to negate the effects of a 37% drop in demand for wind turbines — sparked by the upcoming expiration of a power-production tax credit — with growth in its financial and energy segments. GE Capital saw a 31% gain, while energy profits increased by 13% despite a 1% decline in industrial orders caused by the wind turbine bust.
The company also announced Friday that it would be dividing its energy infrastructure business into three parts: GE Water & Power in Schenectady, N.Y.; GE Oil & Gas in Florence, Italy; and GE Energy Management in Atlanta, Ga.
The restructuring of the energy business — which CEO Jeffrey Immelt described as “a $50 billion company within a company” and which employs 100,000 — will be overseen by Vice Chairman John Krenicki, who is departing at the end of this year.
– Ryan Hauck, InvestorPlace