GE profit tops estimates, shares rise in 'relief rally'

By Alwyn Scott

(Reuters) - General Electric Co posted quarterly results that topped expectations on Friday, as earnings from aviation, healthcare and transportation offset weak power and oil-and-gas profits, sending shares sharply higher in premarket trading.

GE also affirmed its forecast for 2018 earnings and cash flow, and said it expects to book as much as $10 billion in proceeds from divesting industrial assets this year. Those comments eased concern that GE would post poor results.

"This news alone should fuel a relief rally," Deane Dray, analyst at RBC Capital Markets, wrote in a research note.

GE earned an adjusted 16 cents per share, up from a restated 14 cents a share a year earlier. Analysts on average had expected 11 cents a share, according to Thomson Reuters I/B/E/S. GE recently restated 2017 results to reflect changes in accounting standards.

"It's an apples-to-apples, 5-cent beat," said Scott Davis, analyst and chief executive at Melius Research in New York, noting that the figure excludes restructuring costs of about 5 cents a share.

GE's shares were up 5.8 percent to $14.80 in premarket trading, after rising 2.4 percent on Thursday. The stock has lost more than half its value in the past last year.

Analysts had forecast GE's profit to decline in the first quarter and some thought Friday's results might fail to meet even those diminished expectations.

But the company's aviation, transportation and healthcare businesses produced double-digit profit growth in the quarter, boosting overall results.

Profit at GE's power business fell 38 percent on a 9 percent decline in sales; orders dropped 29 percent.

"The industry continues to be challenging and is trending softer than our forecast," GE said of the power business.

Profit in GE's oil and gas unit fell 30 percent, excluding restructuring and other charges, GE said.

Earnings from continuing operations attributable to GE shareholders more than tripled to $369 million, or 4 cents a share, in the quarter ended March 31, from $122 million or 1 cent, a year earlier, the company said. Revenue rose 6.6 percent to $28.7 billion.

GE affirmed that it expects adjusted earnings of $1.00 to $1.07 a share in 2018, excluding restructuring costs, and adjusted industrial free cash flow of between $6 billion and $7 billion. In February, Chief Financial Officer Jamie Miller warned that profits would be at the low end of that range.

(Reporting by Alwyn Scott in New York and Rachit Vats in Bengaluru; Editing by Saumyadeb Chakrabarty and Nick Zieminski)