By Alwyn Scott
(Reuters) - U.S. industrial conglomerate General Electric Co reported a 28 percent drop in quarterly profit on Friday, as weakness in power and renewables energy offset gains in its aviation, oil and gas and healthcare units.
GE affirmed its full-year adjusted EPS target of $1.00 to $1.07 a share, but cut its annual cash target to $6 billion from a range of $6 billion to $7 billion.
Its shares have dropped 49 percent in the past year. Though investors are still interested in GE, many want to see the power and capital units stabilize and even improve before buying the stock, analysts have said.
Losses widened at GE Capital, the company's financing arm, to $207 million compared with a loss of $172 million a year ago.
Power unit profit fell 58 percent in the quarter, to $421 million from $994 million, as orders fell 26 percent to $7.4 billion.
A decade and a half ago, GE was the world's most valuable public company. But it foundered in several key industrial markets in recent years, and a diversion into financial services steered it into the eye of the global financial storm in 2008. Faced with weak profits and calls to be broken up, the 126-year-old company is aggressively cutting costs, selling businesses and trying to strengthen its balance sheet under new managers and a new board.
The stock was marginally higher in pre-market trading.
GE's earnings from continuing operations attributable to GE shareholders fell to $736 million, or 8 cents a share, in the second quarter ended June 30, from $1.03 billion, or 12 cents a share, a year earlier. Total revenue rose to $30.1 billion from $29.1 billion.
On an adjusted basis, which excludes certain pension and restructuring costs, GE earned 19 cents a share, down from 21 cents a year ago.
Analysts had expected GE to post adjusted earnings of 17 cents a share, according to Thomson Reuters I/B/E/S, and had cut their estimates after weak first-quarter results.
Analysts had been looking for higher cash flow to convince them that GE can hit its adjusted free cash flow target of $6 billion to $7 billion for the year. Adjusted free cash flow from industrial activities swung to a positive $258 million in the quarter from a negative $1.7 billion in the first quarter.
(Reporting by Alwyn Scott in New York and Rachit Vats in Bengaluru; Editing by Saumyadeb Chakrabarty and Nick Zieminski)
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