GE Shares Rise as Profit Tops Views

Earns GE
Thibault Camus/APGE CEO Jeffrey Immelt, center, speaks with workers at a GE plant in Belfort, France.
By Lewis Krauskopf

General Electric (GE) reported a slightly higher-than-expected quarterly profit Friday, with cost cuts that helped boost margins across its industrial businesses offsetting revenue that missed analysts' targets.

Shares of GE rose 3.4 percent to $25.07 as the U.S. conglomerate also posted a 22 percent jump in orders for jet engines, locomotives and other industrial equipment and services.

GE reported a 4 percent rise in organic revenue, which excludes acquisitions, at its industrial manufacturing businesses, where Chief Executive Officer Jeff Immelt is increasingly focusing the company.

Although that quarterly growth didn't meet some analyst expectations, GE said such revenue was on track to hit the higher end of its projected range of 4 percent to 7 percent growth for 2014.

Reaching that high end "would be quite a pickup," said Tim Ghriskey, chief investment officer with Solaris Asset Management, which owns GE shares.

"They were able to engineer the earnings in industrials," Ghriskey said. "It's just that the revenues were relatively weak.

"The stock is reflecting more forward-looking statements than third-quarter results."

Like those of other diverse U.S. manufacturers, GE's shares had been underperforming the broader market this year amid concerns about a soft global economy, after a big run-up in 2013.

Asked on a call with analysts about the global economy, Immelt said: "The underlying activity is still reasonably healthy, but not universal." He added that "the U.S. is probably the best we've seen it since the financial crisis."

Immelt is seeking to boost GE's earnings contribution from its industrials businesses to 75 percent by 2016 from 55 percent last year, while reducing its exposure to the GE Capital finance unit.

GE's third-quarter net income rose 10.8 percent to $3.54 billion, or 35 cents a share.

Excluding pension costs and other special items, earnings of 38 cents a share topped the analysts' average estimate by a penny, according to Thomson Reuters I/B/E/S.

Revenue rose 1 percent to $36.17 billion, below the $36.79 billion that analysts expected.

Sales fell 2 percent at the power and water segment, which sells energy-producing turbines and is GE's biggest industrial division. But GE projected sales growth of at least 10 percent in the division for the fourth quarter.

GE's profit margin for its industrial businesses came in at 16.3 percent, expanding by 0.9 percentage points from a year earlier. The company pointed to its efforts to simplify its operations through cost cuts and a wider gap between the price of its products and the expense of producing them.

GE has targeted increasing its industrial profit margins to 17 percent by 2016 from 15.7 percent last year. The expansion in the quarter indicated the company was "well on their way" to meeting that goal, said Perry Adams, portfolio manager at Northwestern Bank.

7 'Bargains' That Could Be Fakes
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GE Shares Rise as Profit Tops Views
You want a pair of UGG Australia boots for less than they're getting at Nordstrom (JWN)? How about the latest Nike (NKE) basketball shoe for less than half price? Sure, you can find them for a fraction of the price they're selling for at major U.S. retailers. And they'll be made of lousy materials and not look anything like the picture on the website.
Whether it's North Face jackets or wedding dresses, there are many fakes to go around. There are plenty of tales of woe from brides and bridal parties who decided they didn't want to pay $1,000 or more for a dress and opted for one that looked the same online and was selling for less than half the price. The upset brides can tell you about getting their special dress delivered shoved into an envelope made from a material that was nothing like what it was supposed to be and with sewing work that was amateur. Think you're going to get the latest Herve Leger dress on the cheap? Not the real deal. But there are plenty of sites that will tell you otherwise.
Not ready to drop $600 on a new iPhone 6? How about $150? If that's more your speed, you can safely assume that you're not getting the real deal. That goes for any electronics item that is the latest and greatest. If it it's new and it's in demand, it's not going to be available at a fraction of the retail price.
This is a traditional hotbed for counterfeits. If you want a Gucci (GUCG) handbag and think $3,000 is a bit over your budget, don't expect that same bag to be available to you even at $500. For every expensive real purse, there are a whole lot more cheaper fakes, even if they're not that cheap.
More than any other category of counterfeiting, pharmaceuticals is one to steer clear of. You might not want to pay the pharmacy prices for Viagra or Lipitor, but cheap online deals aren't the way to go. You don't know what you're getting, regardless of the claims on the sites. Risking taking badly made medicines at the wrong dosage is not a chance you ought to take.
 It's easy to make a fragrance or makeup container look like the real deal. It's another story entirely to make it smell the same and use the same quality of ingredients. The big risk here is not only getting something that smells like men's aftershave instead of a delicate perfume, but that the poor-quality ingredients could cause an allergic reaction. NSF International tested counterfeit cosmetics early this year and found high lead levels.
Rolexes that weren't made by Rolex and sold for $20 instead of, say, $20,000 were a staple of many street-corner vendors in big cities. There are a whole lot of street corners online. In addition to Rolex, there will be plenty of other high-end brands that make premium items at premium prices. Think Tiffany jewelry as another example. You're not going to find that brand in the bargain bin or even on sale. So, if you see a deep discount on such brands, question the authenticity.
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