NEW YORK: Weakness in the oil and gas sector dented General Electric’s fourth-quarter results, pushing revenues lower despite gains in other industrial divisions, the company reported on Friday.
Revenues fell two per cent to $33.1 billion, but net income jumped to $3.5 billion, up about 38 per cent compared to the final quarter of 2015, not counting earnings from discontinued operations.
GE described the macro environment as “slow growth and volatile” but said it was “more optimistic about the US economy.”
Sluggish activity in oil and gas has been a drag on GE earnings in recent quarters due to a two-year slump in oil prices.
A November agreement by the Organisation of the Petroleum Exporting Countries to cut output sparked optimism of a more robust environment for companies like GE that supply drilling services and perform other functions.
But GE said in a presentation that market pressures were continuing in oil and gas, and sales in this business fell 22 per cent to $3.4 billion.
GE announced in October it was merging its oilfield services operations with Baker Hughes. With about $32 billion in annual sales, the combined company is expected to have more leverage in negotiating service contracts with large oil producers.
Despite the declines in oil, GE scored higher revenues and profits in some other industrial divisions, including aviation and power.
GE’s net income for all of 2016 was $8.2 billion, compared with a loss of $6.2 billion in the prior year, following the sale of financial assets.
