GE: Turn The Light Off Eh, what's to like here? General Electric Co.'s second-quarter earnings rose 16%, buoyed by a stronger performance at its GE Capital financial unit and what the company described as an economic environment that "continues to improve."
Yeah, right. "Continues to improve" eh? Then what's this?
Still, revenue slipped 4.3% to $37.44 billion and came in short of analysts' consensus $38.37 billion view. GE blamed the trend on downsizing at GE Capital as well as lower equipment sales and dispositions of some industrial assets.
But but but but but..... you said the economy was "continuing to improve"! How can it be improving if your sales are falling?
GE's getting better at squeezing, er, "collecting" from its customers - that is, in its finance unit. Of course this isn't exactly a straight-up "win" either - revenue there was down 3%.
Earnings? Yes, but what of provisions? And that commercial real estate portfolio continues to bleed, losing $524 million on the quarter - up big (more than double) from a year earlier.
Revenue at GE's energy infrastructure unit came in at $9.54 billion, off about 9%, although profit climbed 3%. Revenue at its technology infrastructure unit came in at $9.06 billion, off 6%. Profit at the unit declined 11%.
But but but but but..... the economy is improving! This, of course, is why we don't need to keep building new energy infrastructure (e.g. electrical capacity.)
Oh wait - you mean we really don't have solid demand for power in the country (and internationally), and their technology infrastructure unit isn't "digging it" either? Revenues off 6% there, and profit down 11%.
Yeah, it's all good.
Pull the other one GE.
I watch the income statements like a hawk. "Earnings" are easily gamed.
Cash?
Not so much.
