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 © 2014 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.
[BRIEFING.COM] Equity indices closed out the month of August on a modestly higher note. The Russell 2000 (+0.6%) and Nasdaq Composite (+0.5%) finished ahead of the S&P 500 (+0.3%), which extended its August gain to 3.8%. Blue chips lagged with the Dow Jones Industrial Average (+0.1%) spending the bulk of the session in the red.
The final week of August represented one of the quietest stretches for the stock market so far this year. The first four sessions of the week produced the ... More
More Market News
These hot movers could rise by double digits in coming months.
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'