Conglomerate posts lower 3Q income, agrees to pay $9.5B for U.K. medical imaging company
October 10, 2003: 5:02 AM EDT
NEW YORK (Reuters) - General Electric Co. cut its fourth-quarter earnings guidance Friday, blaming weak demand for gas turbines and higher costs at its plastics arm, and agreed to buy U.K. medical firm Amersham as it seeks to boost growth.
The conglomerate reported third-quarter earnings of $4 billion, or 40 cents per share, down from $4.1 billion, or 41 cents per share, in the same quarter of 2002. The figure was in line with analyst estimates and company guidance.
Revenue for the company -- which makes power plant turbines, jet engines and medical equipment, provides financial services, and runs the NBC television network -- came in at $33.4 billion, up two percent from the third quarter of last year.
A decline in sales of large gas turbines in the United States and lower non-cash earnings from U.S. pension plans weighed on the results.
For the fourth quarter, the company said it expected to post earnings within a range of 45 cents to 47 cents per share, up about 45 percent from last year. GE had previously forecast fourth-quarter earnings of 46 to 49 cents a share.
Overall third-quarter earnings after the required accounting changes, which moved about $50 billion of assets and liabilities onto its balance sheet, were 36 cents per share, compared with 41 cents a year ago.
The conglomerate's closely watched aircraft engine unit won engine and services orders worth $2.4 billion during the quarter. Commercial finance saw better results for the quarter, posting revenue of $3.50 billion, up five percent.
GE is overhauling its businesses to focus on higher growth areas.
Last December it agreed to buy Finnish medical equipment firm Instrumentarium. On Wednesday it signed a long-awaited deal to merge its show business interests with those of Vivendi Universal.
GE agreed to pay £5.7 billion ($9.5 billion) in shares for UK medical imaging and biotechnology company Amersham. It said the deal would not hurt its 2004 earnings and forecast annual cost savings of $350-400 million after three years.
GE (GE: Research, Estimates) shares trading in Europe fell 2.5 percent early Friday.
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