Europe short-circuits GE
The global giant posted a 16% earnings gain and met Wall Street's estimates. Yet investors see nothing but its trouble in the eurozone.
Excluding one-time items, profit was 35 cents per share, matching the average estimate of analysts surveyed by Bloomberg.
Still, the company's shares are falling in morning trading. Why? CEO Jeffrey Immelt's cautious statements spooked investors.
In the company's earnings release, Immelt said business in Europe was even worse than GE had expected. Revenue in the Industrial Segment declined in the region by 17%. Orders from Europe in the Power & Water business fell 26% and revenue plunged 22%. Health Care segment revenue from Europe slumped 4%.
GE is hardly the only U.S. company whose profit was dragged down by Europe. Caterpillar (CAT) CEO Doug Oberhelman recently told CNBC that he was "very concerned" about its European operations. Ford (F) recently forecast a $2 billion loss from its business there, and rival General Motors (GM) lost about $1.8 billion in Europe.
Europe will continue to be a problem for a while. The Organization for Economic Co-operation and Development expects the eurozone economy to contract in 2013 for a second straight year. GE and other global giants can look forward to more spoiled earnings reports, thanks to the region's unresolved problems.
Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr.
Copyright © 2013 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
The good news: Bad weather means fewer drivers on the road, and they're going slower than usual. The bad news: It's still dangerous.
- 8 questions to ask before Mom and Dad move in
- High deductibles fuel new worries of Obamacare sticker shock
- How to use your credit card to donate to charity
- Try this instead of raising the minimum wage
- People left $500,000 in coins at airports last year
- How your driving can affect your credit
- Obamacare projected to cost hundreds of billions less
- November jobs report: Winners and losers
- Student loan debt climbs for 5th year in a row
[BRIEFING.COM] There wasn't a lot of excitement in the stock market today and there is nothing wrong with that. After rallying in broad-based fashion on Friday, the major indices stood their ground (for the most part) amid a lack of conviction from buyers and sellers alike.
Today wasn't a case so much of the stock market going up as it was a case of some influential stocks going up to keep the major indices on a winning path. In fact, decliners were just about even with ... More
More Market News
The photo-sharing site only has 10 employees, and it may be up for grabs.