General Electric (GE) posted better-than-expected first-quarter earnings Friday and said it expects cash flows to continue to improve for the remainder of the year.
Adjusted first-quarter earnings per share were 21 cents, the company said, well ahead of the 17-cent average from analysts surveyed by FactSet. Revenue for the period was $27.76 billion, GE said, again ahead of analysts' forecasts of $26.4 billion.
Sales excluding acquisitions grew 7%, and orders were 10% higher than a year ago.
"GE had a good quarter in a slow-growth and volatile environment," CEO Jeffrey Immelt said on a conference call with analysts. The company benefited from a $3.2 billion sale of its water business that "exceeded our expectations," he added, and the wind-down of its sprawling GE Capital business is largely complete.
GE climbed 0.7% to $30.48 before the start of regular trading in New York on Friday, giving a boost to activist shareholder Nelson Peltz, whose Trian Fund Management pushed the Boston-based conglomerate earlier this year to set new performance targets that would help meet an earnings target of $2 a share in 2018.
Under the deal between Trian and GE, Immelt and his senior management team will get a 20% boost in their bonuses if they deliver $17.2 billion in industrial operating profit while reducing structural costs in manufacturing by $1 billion this year and next.
"We're off to a strong start," the CEO told analysts, and "we expect to hit our goal for $1 billion structural cost-out."
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