The plunge in oil prices hurt operating profit at GE's core industrial businesses. Fred Katayama reports.
The plunge in oil prices hurt operating profit at GE's core industrial business. General Electric plans to cut $400 million in costs at its oil and gas business to offset the pricing and volume pressure. Profit also fell at its energy management, renewable energy and power businesses. GE is betting its future on its industrial businesses, which also include the aviation and transportation units that did well. The power business it recently bought from France's Alstom helped boost its order backlog significantly. GE, a Dow component, is seen as a bellwether for the economy. CEO Jeff Immelt said, "We recognize that the first few weeks of 2016 have been especially volatile." But he also said, "... there is enough growth out there to deliver in 2016." Stifel analyst Robert McCarthy called it an "OK quarter," saying "Industrial organic revenues, organic orders were OK in the macro context, and we thought the margin delivery was decent overall..." GE's overall profit rose, but revenue fell shy of expectations. Investors weren't impressed. GE shares, down 8 percent this year, lost further ground in early trading.