GE profit, revenue drop on finance unit weakness
Leading the way will be investment banks and brokerage houses, whose earnings are seen surging 40%. The industry has once again become such a driver of U.S. earnings growth that, without it, corporate profits would be seen declining 3.2% in the second quarter compared with a year ago. Even including financial services, profit growth of the S&P 500 companies is expected to come in at a tepid 0.4%. But even that’s better than the outlook for tech-sector profits, which are expected to drop 8.3% in the second quarter, according to Zacks, following a drop of 4.2% in the first quarter.
GE said its order book, an indicator of how much work it has received from customers, was up 4 percent globally and 20 percent in the U.S., a jump that surprised investors. “This is as close as GE comes to a positive surprise as possible,” said Tim Ghriskey of Solaris Asset Management, which owns GE shares. GE Capital’s revenue fell 3 percent from the same period last year, and its earnings dropped 9 percent. GE, the world’s largest jet engine manufacturer, posted second-quarter net income of $3.69 billion, or 36 cents per share, for the second quarter, from $4.01 billion, or 38 cents per share, a year earlier.